MercoPress. South Atlantic News Agency

“Until world tension abates”, oil prices will keep surging

Ministers from the Organization of Petroleum Exporting Countries, OPEC, conceded on Monday in Doha there was nothing they could do to halt surging oil prices that threaten consumer nations' economies.

OPEC already pumping as much as refiners can handle, concluded following the 10th International Energy Forum in Doha, Qatar that raising its 28 million barrels per day output ceiling would not rein in runaway prices.

"The market determines the oil price" Saudi Oil Minister Ali Al-Naimi, OPEC's told reporters. "You know and I know that the reason the price is where it is not from a shortage of crude oil supply," he said.

Oil surged to an all-time high above 75 US dollars pb last week as Iran continued to defy world pressure to halt its nuclear program, Nigeria's output decreased after rebel attacks and Iraq's oil industry remains mired in the war.

In the official statement following the International Energy Forum, 22-24 April, OPEC Ministers reflected "that actions taken by the Organization in recent years have increased stability in the oil market, to the benefit of producers and consumers alike, whilst decisions taken by the OPEC Conference during the preceding eighteen months have clearly demonstrated OPEC's success in overcoming supply disruptions by assuring adequate supplies to consumers".

"At the same time, however, the market remains volatile, with prices being driven more by geopolitical uncertainties and speculation than by supply/demand fundamentals, which clearly indicate that crude volumes entering the market are currently well in excess of actual demand, as levels of crude stocks in OECD countries demonstrate".

Libya's top oil official said fears of a U.S. strike on Iran, the world's fourth biggest crude exporter, had added 15 US dollars to the cost of a barrel of oil.

Top exporter Saudi Arabia, a close U.S. ally, also spoke of international tension. "There is nothing that can be done about the tension that has been created and until that tension abates the price will continue to be high" Naimi said.

Energy consumers and producers from 60 countries meeting in Doha for the International Energy Forum agreed there was an urgent need to bring down prices, but they were split over how to do it.

Consumers want greater access to oil and gas in the Middle East, Russia and Africa and producers want to be sure investing in new fields will pay off. Both sides coincide in criticizing major oil firms for failing to build new refineries.

OPEC members point out they have raised oil output by over 10% since 1999 with Saudi Arabia alone spending 50 billion US dollars over the next five years on new fields and refineries. In contrast, the United States, which uses a quarter of the world's oil, has not built a refinery on its soil for decades.

A conciliatory U.S. Energy Secretary Sam Bodman said he would not ask OPEC to pump more even though U.S. gasoline at the beginning of the summer season has already reached 3 US dollars a gallon.

"We have encouraged producing nations to keep oil markets well supplied -- I think they've done that," he said.

The OPEC statement finally re-emphasized "the Oorganization's firm and proven commitment to providing adequate supplies of crude to consuming nations, as well as OPEC's commitment to stabilizing the market and realizing its objective of maintaining crude oil prices at fair and equitable levels for the benefit of the world economy and the wellbeing of the market".