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VIENNA: Since July, the average oil prices of the
Organization of Petroleum Exporting Countries (OPEC) have almost
doubled, rising from less than $70 per barrel to more than $140.
Facing the skyrocketing prices,
different people gave different reasons.
Supply the culprit
Consuming countries say the
inadequate oil supply is the main factor for price hike.
During the debates on why the oil
prices surged so high, most Western oil-consuming countries said the
situation has largely resulted from supply shortage, and they blamed
OPEC for refusing a production increase.
In the United States, the
world’s top energy consumer, the House of Representatives has
adopted a bill earlier this year which authorizes the US government
to sue OPEC for controlling oil prices.
In a report released recently,
the International Energy Agency (IEA) said the real reason for the
current high prices was the concerns on the global stable supply in
the future.
The agency predicted an annual
demand growth of 1.6 percent till 2013, which means the daily global
oil output should rise from the current 86.87 million barrels to
94.14 million barrels.
The IEA’s latest energy report
also adjusted its oil demand of the second half of this year from
86.10 million barrels per day to 86.90 million barrels, predicting
even a daily demand of 87.70 million barrels for next year.
OPEC members reject accusations
from big consumers
Instead, OPEC members have blamed
speculators for inflating oil’s rally and adding volatility to the
trade. They also demanded further regulation of future markets to
give a blow to speculators.
They also attributed the price
hike to the weaker dollar and escalating geopolitical tension rather
than the imbalance between supply and demand.
King Abdullah bin Abdul-Aziz of
Saudi Arabia, which lords over one-fifth of the world’s oil
reserves and has a strong say in OPEC, announced recently that the
high prices were mainly the results of speculations, and that OPEC
would remain powerless in curbing the prices.
Their reluctance for a production
growth is mainly drawn from their concerns over the growth prospect
in the international oil demand in the coming years.
Because of the increasing oil
output of the non-OPEC countries and the widening use of the
alternative energies such as biofuels, OPEC predicted that the
growth of the global oil demand would slow down. It lowered its
global oil demand forecast for the year 2030 to 113 million barrels
per day, which was some 4 million barrels less than their 2007
estimation.
It is the current OPEC belief
that the world’s main oil consuming countries have had a downward
trend of crude oil consumption due to their investments in the
energy-saving technologies and alternative energies.
Obviously, OPEC members consider
it risky if they invest large amount of money into their oil
exploitation and refining capability because of the uncertainties in
the future oil demand.
As such investments usually take
five to seven years to mature, these OPEC countries are worried that
the supply and demand on the international oil market would be even
reversed by the time the new plants become operational.
They will, therefore, continue
their reluctance in raising output unless they get future demand
insurance from the oil consuming countries.
Joint responsibility
Prices for crude oil, as one of
the most important strategic resources and basic raw materials,
would be influenced by not only supply and demand but also
geopolitical developments, global economic outlook, climate
policies, population and stock market, experts generally said, thus
calling for a joint responsibility.
Experts also reached another
consensus that the recent souring prices should be attributed to
financial factors, rather than the commodity itself. The devaluating
dollar pushed a large amount of money into such commodity markets as
oil and gold.
As Iranian Oil Minister Gholam
Hossein Nozari put it earlier that “the problem was not the oil
was too expensive, but the dollar [was] too cheap.”
--Xinhua
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