By BENOIT FAUCON, SUMMER SAID and HASSAN HAFIDH
Amid mounting tensions with Iran, western motorists have borne the brunt of sky-high oil prices while oil producers filled their coffers. But they too are starting to worry the bonanza may not last.
As they prepare to meet with consumers at an energy summit in Kuwait, some of the world's top oil producers voiced concern that rising oil prices may backfire by jeopardizing a global economic recovery.
In an interview with Dow Jones Newswires ahead of a meeting of the International Energy Forum, Jose Maria Botelho de Vasconcelos, Angola's oil minister, said "when the price is high, it's not good" for oil nations, too.
He was speaking after Hani Hussein, the Kuwait oil minister hosting the summit, was quoted as warning that a fresh rise in international oil prices would harm producers in the medium term.
The soundbites coming out of the Gulf emirate contrasts starkly with previous views by members of the Organization of Petroleum Exporting Countries that the economy can cope with current oil prices.
But the UK's Brent contract has risen by 17% since the start of the year after Iran threatened to block the Strait of Hormuz, a narrow corridor used to ship a fifth of the world's oil supplies.
And earlier, reports - later denied - that a Saudi pipeline had been blown up pushed Brent prices to their highest level in about four years, leading to concerns they could return to levels not reached since 2008, when a record high of $147/bbl was blamed for worsening a global recession.
Asked if an increase in oil prices to 2008 could endanger a global economic recovery, Angola's de Vasconcelos, whose country is the second largest crude-producer in Africa, said "I think so." A current price of $125 a barrel for the Brent is already "a little bit high," he said.
Even Saudi Arabia, the world's largest oil exporter, is "slightly worried about recent oil price hikes as it's not based on market fundamentals," a top official from the Kingdom said on the side of the conference.
Indeed, while buoyant oil prices are boosting revenue for oil producers, they are also starting to realize further spikes could sharply hit demand for their crude and ultimately push prices into a downward spiral.
Though producers have yet to hit the panic button, there are fears prices may be getting closer to the danger zone.
In its monthly report last week, OPEC said US oil consumption data for December showed the worst contraction observed since July 2009 and preliminary data for January and February 2012 has displayed similar drops.
For now, the decline in the west has been offset by Chinese purchases on international oil markets. But the Asian nation has been filling up its crude oil and products storage in January. That means it could draw into its stockpiles and cuts its imports if its finds global oil too pricey.
If that happens, it would be the turn of producers to feel the bite.
Dow Jones Newswires