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Saudi Arabia calls for oil summit

DUBAI: Saudi Arabia — the world’s largest oil producer — has called for a meeting of oil producers and consumers amid reports that there are no quick-fix solutions to rein in surging energy prices.

Saudi Arabia’s Culture Minister Iyad Madani said on Monday that the kingdom’s Oil Minister has been instructed to call a meeting of producers and consumers. The announcement came after the unprecedented jump in oil prices of $11, four days ago, which breached the $139-per-barrel mark.

The Minister made two additional points. First, he pointed out “there is no justification for the current rise in prices,” countering views that the demand-supply gap was mainly responsible for the recent hike. Secondly, he stressed the kingdom and its OPEC allies were ready to address augmentation of supplies, if required. Mr. Madani pointed out that Riyadh had informed “all oil companies it deals with as well as countries that consume oil that [the kingdom] is ready to provide them with any additional oil they need.” He added Saudi Arabia would also work with OPEC to “guarantee the availability of oil supplies now and in the future.”

Mr. Madani’s remarks on prospects of stable supplies conflict with the findings of the latest report of the Paris-based International Energy Agency (IEA), which concluded that supply was chasing the spiralling demand for oil in Asia, leading to the spike in prices.

“This is a case of supply and demand pulling in opposite directions to push prices higher,” said the IEA. It also observed the growth of supply from non-OPEC producers is expected to decline sharply, resulting in additional pressure on OPEC to meet growing demand.

On Tuesday, Russia’s energy giant, Gazprom, said oil prices could touch $250 per barrel by 2009. Gazprom’s Chief Executive Alexey Miller said: “Today, we witness a very great change for hydrocarbons, the level is very high and we think it [the price of oil] will reach $250 a barrel.”

Observers said the current oil crisis has triggered afresh the debate about the need for privatisation of oil in the producing nations.

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