Opec Discusses The Future Energy Agenda And Relations With The World Economy
Walid Khadduri Al-Hayat - 18/11/07//
The ministerial symposium at the Third OPEC Summit, held on Thursday and Friday in Riyadh prior to the convening of the summit of heads of state over the following two days, saw participation by many experts and representatives of different viewpoints, and was open to the press. The participants discussed various topics related to the future of energy and relations with the world economy, especially matters that concern oil-producing and -consuming countries. These topics ranged from securing the necessary supplies for the market, affirming the availability of new oil supplies to meet demand, and the high increase in the costs of new sector development projects.
Constructive and open discussions characterized the symposium, reflecting the confidence by OPEC members that they are doing what they should at the international level when it comes to energy, and their conviction that the issue of high prices is a problem for which open international financial markets, which lack transparency and the necessary structures, are responsible. The discussions revealed that OPEC and the international economy are experiencing a critical historical moment, and that key topics are under discussion, such as the relationship of energy to the environment and the relationship of energy to support for the international economy and expanding prosperity among the countries of the world. These topics are high priority matters for producing countries, and should be dealt with in the spirit of the common interest of humanity. It was quite obvious during the discussions that cooperation between producers and consumers is important; it is necessary in order to find practical solutions for these problems that serve the interests of all sides. During the discussions, it was affirmed that these solutions will not become apparent over the short term and that implementing them will require a long period of serious and joint action before the results appear.
Of course, participants raised the topic of the currently high price of oil, which has approached $100 a barrel, and the responsibility for this phenomenon, especially regarding the de-linking of market foundations and the daily course of this price rise, and what OPEC can do to treat the situation, along with what the organization has actually done until now regarding increasing production levels. Naturally, this issue saw a difference of opinion between representatives of exporting states, who highlighted the role of speculators in financial markets, not to mention the failure by western consuming countries to build enough new refineries over the last two decades. Representatives of producing countries affirmed that there is enough oil in the market and that available reserves in their countries can meet demand over the coming decades, despite the anticipated increase in demand. Meanwhile, the opinion of some western analysts can be summarized as follows: the reason for the price increase is due to fundamental market factors, such as the anxiety by consumers about the failure to discover new giant fields in recent years, and the resulting fear, which is reflected in prices, about the possibility that not enough new oil will be discovered in the coming period. These analysts indicated that the majority of international oil reserves are located in the Gulf, which is hampered by various political threats, especially the conflict between the west and Iran over that country's nuclear program and the expected consequences if diplomatic efforts fail to arrive at a solution and a military option is resorted to in order to end Iran's program; there is fear about the impact of this conflict on price levels.
These topics, especially the impact of high oil prices on the international economy in general and the economies of developing states in particular, in addition to the economies of producing countries themselves; the impact of price rises on inflation levels the impact of the costs of project to develop and expand the sector, not to mention the repercussions of high oil prices on developing energy alternatives, are all the more important that they received wide interest by participants in the symposium and sparked an extensive debate about the relationship between energy and the environment.
The discussion of this topic focused on the need to pay attention to environmental issues and deal with them in more comprehensive fashion. It was clear during the discussions that oil states are taking an important initiative on this score, in the interest of its peoples and the world in general, to try and stop the current, increasing campaigns that target the role of oil as a strictly environmental problem and reduce the role of other factors in this problem.
During the symposium, participants focused on the important of international prosperity and growth, highlighting the level at which oil states take part in offering assistance and soft loans, whether through joint development funds or through bilateral aid. Oil countries have offered such financial assistance or soft loans to around 120 countries, for a total of around $90 billion.
The discussions at this open symposium revealed the degree to which opinions and interests differ, as well as the diversity of proposed solutions for these problems and the need for cooperation between producers and consumers through joint and bilateral action in order to arrive at solutions that help all of humanity, and not just one segment of it.
*Specialist in energy affairs
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