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.
He blamed speculators' focus on oil futures, without taking delivery of physical oil, for causing volatile price distortions.
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 capacity.
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 markets.
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 oil-producing countries."
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 prices.
"The role of oil exchange market in market fluctuations and price volatility cannot be overlooked," he said.
Dow Jones Newswires