Al-Naimi at theInternational Energy Forum Charter meeting in Riyadh
80 countries sign new new International Energy Forum Charter
Minister of Petroleum and Mineral Resources Ali Al-Naimi at the International Energy Forum Charter meeting in Riyadh on Tuesday. (AN photo)
RIYADH: Minister of Petroleum and Mineral Resources Ali Al-Naimi said Tuesday OPEC is prepared to meet any shortage of supplies due to unrest in the Middle East and that its members have sufficient spare capacity to do so.
“There is absolutely no shortage of supply now ... OPEC is ready to meet any shortage in supply when it happens,” Al-Naimi told a press conference at the end of a consumer-producer meeting that signed a cooperation charter. “There is concern and fear, but there is no shortage,” the minister reiterated .
Saudi Arabia is pumping around 8.4 million barrels per day, but Al-Naimi said the Kingdom still has a spare capacity of another four million bpd. Speaking after unrest in the Middle East caused oil prices to jump Tuesday to $108 a barrel, the minister said the market volatility was only short-term and would not result in any shortages.
“OPEC and particularly Saudi Arabia will compensate any shortage because we did that successfully in the past ... I want this transmitted to the market so people can sleep well tonight,” Al-Naimi said.
Oil ministers and delegates from more than 80 countries signed on Tuesday the new International Energy Forum Charter, which aims to bring new stability to global oil markets for the benefit of both consumers and producers.
The agreement, signed at Riyadh’s King Abdul Aziz International Conference Center, clears the way for more dialogue between parties on either side of the energy equation and expands the Joint Organizations Data Initiative (JODI), which tracks supply-and-demand issues to minimize price spikes in either direction.
“Given oil’s unique and vital function in economic and social development, it is difficult indeed to imagine an area in which nations are more interdependent than energy or a conversation more vital to their wellbeing,” said Al-Naimi.
“Saudi Arabia’s status as a major oil producer and exporter and our guiding principles of moderation and balance have positioned the Kingdom as one of the most ardent and persistent advocates of open dialogue. We are confident that the charter will enhance dialogue and cooperation among all concerned parties to the benefit of future generations.”
Charles Hendry, the British minister of state for energy, said his government firmly supports the IEF work. “The security of oil and gas supplies are of key importance to the whole world and will remain so for the foreseeable future,” Hendry said.
“Growing energy consumption will see demand for these fuels rise significantly even as we increase our use of low-carbon energy sources. This makes open dialogue between oil consumers and producers essential if we are to avoid the price volatility so damaging to economic growth and to the investment needed for future oil production.”
One delegate described the unique selling point of the IEF is that it gathers ministers and companies to discuss and find workable solutions to problems. “It brings together ministers who would otherwise neither meet nor discuss things so easily,” he told Arab News. “The informal character ensures they are at ease, as well.”
Al-Naimi told delegates the JODI would start paying off, contributing information into a global network to provide oil officials with a new tool to understand and remedy speculative price volatility.
“JODI provides important energy-related data to the public,” Al-Naimi said. “Energy producers and consumers believe that JODI is an important achievement that helps countries plan better for the future.”
India’s Petroleum Minister Jaipal Reddy said such dialogues mean a lot to one of the most important consumers of oil. “Here you can have free and frank dialogue among the producers and the consumers,” Reddy said.
“Both can understand and even appreciate each other’s point of view. India, like other countries, wants stable oil markets. We want oil prices to stabilize at a point that is reasonable from points of view of both the producers and consumers.”
Pakistan was represented by former minister Raja Pervez Asharaf. “We are a major importer of oil, and we see this dialogue as a key to market stability.”
Any drastic increase in oil prices throws our budget awry, so extreme volatility is not in anybody’s interest. This is what is being discussed here at this extraordinary meeting,” he told Arab News on forum sidelines.