By SUMMER SAID, HASSAN HAFIDH and BENOIT FAUCON
KUWAIT CITY -- Leaders of some of the world's largest oil
producing nations Wednesday pinned current high oil prices
primarily on market speculators, just as consuming nations
warned that even present increased output levels are being more
than offset by numerous supply problems.
Brent crude oil prices are up around 17% this year, and in
early March hit highs last seen in July 2008.
Fears over a loss of Iranian oil supplies amid rising
tension with the West over its nuclear program, in addition to
supply losses from South Sudan, Yemen, Syria and the North Sea
have fuelled concerns over whether tightened global oil supply
can meet demand.
Addressing the International Energy Forum of major oil
producers and consumers here, Saudi Oil Minister Ali al-Naimi
said growing interest in energy commodities as an asset class
had increased market speculation, which was based on guesswork
that oil supply would be constrained in the future.
blamed speculators' focus on oil futures, without taking
delivery of physical oil, for causing volatile price
Naimi said the physical oil market is "generally balanced,
and there is ample production and refining capacity."
"Saudi Arabia and others remain poised to make good any
shortfalls - perceived or real - in crude oil supply," Naimi
said, according to a copy of his remarks, which he made outside
the presence of reporters.
The International Energy Agency, however, said Wednesday in
its monthly report that global oil supply fell by 200,000 bpd
in February, despite Saudi Arabian production hitting a 30-year
high, as supply from countries outside the Organization of
Petroleum Exporting Countries fell by 500,000 bpd, putting
extra pressure on OPEC's already slim spare production
Naimi's speech didn't tackle Iranian threats to close the
strategic Strait of Hormuz, through which Persian Gulf
producers export around one-fifth of the world's oil supplies,
or the disruption such a move would cause a spike in the crude
Iran's Oil Minister Rostam Ghasemi blamed sanctions and the
political use of oil by consumer nations for endangering global
energy security and contributing to volatile oil prices, saying
major energy consumers use oil "as a political tool against
But US Deputy Energy Secretary Daniel Poneman said Iran's
noncompliance with international nuclear safeguards is the
underlying case of current oil-market instability.
In recent months, the West has been ratcheting up sanctions
on Iran's oil sector over Tehran's nuclear program.
South Korea, for instance, is considering reducing its crude
oil imports from sanctions-hit Iran and is in talks with the
United Arab Emirates to secure more oil-field contracts, the
country's vice minister of knowledge economy said.
But Ghasemi, whose country is the world's fourth largest
crude exporter, also joined Abdalla Salem el-Badri, secretary
general of the Organization of Petroleum Exporting Countries,
and al-Naimi in blaming speculation for current high
"The role of oil exchange market in market fluctuations and
price volatility cannot be overlooked," he said.
Dow Jones Newswires