Oil producers, consumers at loggerheads
The world’s oil producers and consumers have agreed that a record price of $75 a barrel for crude oil is a danger to everyone, but failed to find a shared strategy to bring prices down.
They are split over how to pull prices away from their inflation-adjusted high of above $80, reached in 1980, the year after the Iranian revolution. Consumers want more oil. Producers want to be sure investing in new fields will pay off.
Edmund Daukoru, the president of Opec, said on the second day of talks at the International Energy Forum in Qatar: “The two are moving in parallel but there is no meeting point.”
The meeting brings together ministers from 65 countries, including the United States and members of the Organisation of the Petroleum Exporting Countries (Opec).
Senior executives from 32 oil companies including Chevron, ExxonMobil, BP, Royal Dutch Shell and Saudi Aramco were at the talks.
Soaring oil prices
Oil raced to an all-time high last week as Iran continued to defy world pressure to stop its nuclear programme, a quarter of Nigeria’s output lay idle after rebel attacks and Iraq’s once considerable oil industry was mired in the country’s ongoing chaos.
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“Opec is producing as much as it can and there is not physical lack of oil, so I don’t think there will be a change” The Iranian oil minister, |
Consuming nations – from top energy user the United States to the emerging economies of Africa – are afraid that high energy costs will drive up inflation and cut growth. Producers fear a collapse in oil demand.
The Algerian energy and mining minister, Chakib Khelil, said: “There is a need to coordinate more. We are not getting a lot of feedback from companies, they are not talking.”
No production increase
Some Opec members point out that they have increased oil output by more than 10% over the past six years. Saudi Arabia alone will spend $50 billion over the next five years on new oilfields and refineries.
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“We’ve actually spent a lot of time talking. I’ve lost my voice, I think” Royal Dutch Shell’s chief executive |
Now producers want consumers to release their energy plans. They note that George Bush, the US president, has made it his goal to kick his country’s addiction to oil and the US energy secretary, Sam Bodman, has said he hopes for a rebirth of nuclear power.
Separately, Kazem Vaziri-Hamaneh, the Iranian oil minister, said that Opec countries are already producing as much oil as they can and there will be no increase in production.
“Opec is producing as much as it can and there is no physical lack of oil, so I don’t think there will be a change,” he told journalists on the sidelines of the energy forum.
“There is clearly enough being offered by Opec and Iran is also producing at a level close to its quota. So Opec is doing its best at the moment, stocks are improving, the production level is appropriate.”
US Iran policy blamed
Jeroen van der Veer, the chief executive of Royal Dutch Shell, voiced the frustration of many firms and consumers at the conference.
“We’ve actually spent a lot of time talking. I’ve lost my voice I think,” he said.
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“There is clearly enough being offered by Opec and Iran is also producing at a level close to its quota. So Opec is doing its best at the moment, stocks are improving, the production level is appropriate” Kazem Vaziri-Hamaneh, |
Some Opec delegates say US foreign policy is partly responsible for today’s record prices.
Increasingly strident exchanges between the US and Iran over its nuclear programme have raised fears that the world’s fourth biggest oil exporter may halt flows or be forced to do so by international sanctions.
The US slapped a unilateral ban on Iran‘s oil in the mid-90s, but Europe and Asia remain big customers.
Shokri Ghanem, an official from Libya, said fears of US military action against Iran had added up to $15 to the price of oil.
Other producers blame a lack of planning in consumer nations, particularly the US, which uses a quarter of the world’s oil and more than 40% of its petrol, but has not built a new refinery on its soil in decades.
The planned introduction of new, cleaner petrol in the United States this summer may lead to short-term supply disruptions, the US energy secretary said on Friday. He is due to arrive in the Qatari capital, Doha, later on Sunday.