Asian consumers, producers call for stabilising oil market

Asian consumers, producers call for stabilising oil market
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First Published: Thu, May 03 2007. 09 11 AM IST
Updated: Thu, May 03 2007. 09 11 AM IST
By Omar Hasan, AFP
Riyadh: Major Asian oil producers and consumers ended a roundtable in Saudi Arabia on 2 May by calling for boosting cooperation to stabilise the world oil market and for maintaining spare capacity.
Energy ministers representing 17 Asian countries also called for promoting investments in the energy sector to increase the spare production capacity needed to maintain a balanced oil market.
A joint statement also called for working “toward open, competitive and transparent oil and gas markets, in order to reduce uncertainty and volatility in these markets.”
The ministers also called for work towards insulating “energy markets from unwarranted political influences wherever they may occur.”
Saudi Oil Minister Ali al-Nuaimi told a press conference that the meeting also discussed the security of supply and demand for consumers and exporters.
He also defended market forces in determining the price of oil.
“Price is determined by the market, not by producers or consumers,” Nuaimi said, adding that outside factors, such as tension, also affect crude prices.
The minister reiterated that current oil supplies are “sufficient and balanced,” ruling out demands by major consuming nations for OPEC to raise output.
At the opening of the meeting, Nuaimi, whose country is the world’s top oil exporter, assured East Asian consumers they can depend on the Middle East for sustained and secure supplies of crude.
“I would like to assure you that the importing Asian nations can depend on West Asia for future security of oil supply,” Nuaimi said.
“After all, the majority of world supply and reserves are concentrated in only a few countries, and most of them are represented at this roundtable,” the Saudi minister said at the one-day event.
The meeting, the second of its type following one in India two years ago, was attended by ministers from the oil-rich Gulf Cooperation Council states and major consumers like China, Japan, India and South Korea.
“Our hydrocarbon link is very strong and very important to both sides. About two thirds of oil exports from West Asia go to East Asia, and about 70% of East Asian crude imports come from West Asia,” Nuaimi stressed.
Japan’s minister of economy, trade and industry resources, Akira Amari, called for energy conservation and for the expansion of energy production capacity to meet rising demand.
“It is vital that energy production capacity be expanded so as to respond to the expanding energy demand,” said Amari, adding that both producer and consumer countries should pump in more investments.
He also called on oil exporters to ensure stable supplies of “oil and natural gas based on economic rationality, and for enhancement of market transparency.”
Oil consumption in Asia has risen an annual average of 15% over the past five years, the Japanese minister said, adding that global energy demand is expected to grow by 50%, mostly in Asia, by 2030.
The energy demand in Asia now accounts for nearly 40% of world’s total, and nearly 60% of the expected growth in world demand by 2030 is anticipated to come from Asia, Amari said.
“There is a limit on the supply side. As a result, the supply-demand relations of oil and natural gas will supposedly continue to be structurally tight,” he said.
Bahrain Oil and Gas Minister Abdul Hussein Mirza said discussions among ministers also focused on prices and consumers’ fears that they may increase further.
“Consumer countries wanted prices to be lower, but eventually both sides agreed that current prices were acceptable. They however expressed concern that prices may go higher,” Mirza said.
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First Published: Thu, May 03 2007. 09 11 AM IST