|
Last Updated: Jun 23rd, 2008 - 16:11:13 |
EUobserver - In the face of the continued surge in oil prices, Saudi Arabia - the world's largest oil producer - has agreed to raise its production to some 9.7 million barrels a day by the end of July.
The announcement came shortly before 35 countries met for crisis oil talks in Jeddah, Saudi Arabia, on Sunday (22 June).
The price of oil has doubled in the past year, coming close to $140 a barrel in June. Oil accounts for some 37 percent of EU energy consumption.
"It is the policy of Saudi Arabia to satisfy the market need when there is a need," the kingdom's deputy oil minister, Prince Abdulaziz Bin Salman, was cited as saying by Bloomberg.
But the prince insisted that an increase in supply will not necessarily lower prices. He blamed the current trend on market speculation.
The view was backed by Chakib Khelil, the president of the Organization of Petroleum Exporting Countries (OPEC), by saying: "The price is disconnected from fundamentals. It is not a problem of supply."
Other OPEC members such as Iran, Venezuela and Libya blame the weak dollar as well as US military engagement in Afghanistan and Iraq for the surge in oil prices.
Oil-producing countries and consuming states continue to disagree over what constitutes the main driving force behind current price hikes.
According to US energy secretary Samuel Bodman, the record prices are a result of fast growing demand, especially from emerging economies such as China and India. The market needs three to four million barrels a day of spare oil production capacity compared to the current two million barrels, he said.
UK prime minister Gordon Brown issued the similar message, saying: "Anyone looking at it knows there is more demand than supply, and it is the same if you look at future years due to the rise of China, India, Asia."
"So whatever the impact of speculative forces, the real issue, the concrete problem is how demand can be brought into line with supply," he added.
UK leaders have also pushed for alternatives to oil, namely nuclear and renewable energy, and invited the Gulf States to invest some of its $3 trillion in oil revenues in Western renewable technologies, the Guardian reports.
"I urge all oil producers to rigorously break down old barriers standing in the way of new strategic initiatives," Mr Brown was cited as saying by the BBC, stressing that his country is committed to realising some 15 percent of its energy needs from "green" sources by 2020.
EU energy commissioner Andris Piebalgs, for his part, has called on oil producing countries to increase both production and investment in new production capacity. Consuming countries, in his view, should push strongly for energy efficiency, ensure that emergency stocks are at high levels, and combat market speculation.
"With determined action on all these fronts, we can bring the price of barrel to a reasonable level," Mr Piebalgs said in Jeddah.
The UK will hold a follow-up oil summit later this year, most likely in October.
Top of Page
Post an instant comment or a suggestion to the above article or news
Note: You can use the above link to form a new discussion forum, place your opinion and discuss events, politics, articles, environment, fashion, health, internet, search engines, marketing, movies, music, religion and any other topic.
|
Submit Articles
Author Login
