Nov 28, 2007, 8:22 GMT
Singapore - Global oil markets are well supplied and Gulf countries are 'not only able but willing' to assure Asia of a steady amount well into the future, OPEC President Mohamed bin Dha'en al-Hamli said on Wednesday.
Stressing readiness to meet any supply shortage, Hamli, also the UAE's energy minister, said, 'We are are prepared to increase production as and when required.'
Hamli and Saudi Arabian Oil Minister Ali al-Naimi addressed a Middle-East-Asia energy conference in Singapore along with other ministers.
The Gulf supplies more oil to Asia than Europe and North America combined, Hamli said.
He noted there was no shortage of crude in the market to power Asia's phenomenal growth and 'fundamentals do not support current high prices.'
Oil slid to below 94 dollars on Wednesday amid expectations of a rise in OPEC production, analysts said.
Continuously rising demand, particularly from major emerging markets like China, face increasing supply challenges, the delegates were told.
'Oil and gas extraction in a maturing industry requires more sophisticated solutions and huge investments, while the increasing cross border transport of energy calls for deepened international cooperation,' said a statement from the Gulf Research Centre, a Dubai-based think tank and the S Rajaratnam School of International Studies, the conference organizers.
'Geopolitical tensions have to be eased while innovative transport and strategic storage solutions have to be found,' it added.
Naimi said oil prices near 100 US dollars a barrel were driven by 'temporary factors,' such as the weaker US dollar, geopolitical tensions and speculators.
'We observe with great concern the recent escalation of oil prices,' he said, reiterating the market is well supplied and inventories are comfortable.
The Middle East has 60 per cent of worldwide oil reserves and 40 per cent of gas reserves, said Naimi. About two-thirds of its energy exports go to Asia, a region that on its own cannot meet its increasing energy needs, the ministers noted.
'Asia can continue to grow strongly only if it is not overwhelmed by rising oil prices and inflation, said Singapore's Senior Minister Goh Chok Tong. 'Rising oil prices are exerting inflationary pressures and straining the budgets of governments that subsidize energy use.'
Former prime minister Goh called for a 'new era of cooperation' between Asia and the Middle East including co-investment in energy infrastructure, research and development in renewable technologies and in green technology.
He cited energy security to ensure the safety of vital transit routes such as the Straits of Malacca and Singapore.
'About 60 per cent of China's imported oil, as well as 90 per cent of Japan's and 80 per cent of Korea's, passes through the straits from the Middle East,' he said.
'Any disruption would have far-reaching consequences for the global economy,' Goh added.
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