Secure Oil Dominates International Forum Amid Iraqi Concerns
Industrialized countries, with the backing of their Asian counterparts, are pushing the 11-member OPEC oil cartel to force the price oil down to $21 a barrel from a current level of $28 a barrel, AFP reported.
Last week the Organization of Petroleum Exporting Countries (OPEC) opted to leave quotas unchanged with total production at 21.7 million barrels a day with the aim of keeping oil prices between $22 and $28 a barrel.
The price includes a three to five dollar war premium, sparked by fears of a United States-led invasion of Iraq and OPEC has the left the door open for a price adjustment by calling an extraordinary meeting for December 12.
A Japanese economic and trade official said delegates were privately briefed on the Iraqi situation and there was a focus on an emergency response in the event of oil supply disruptions.
"Terrorist attacks of course have an influence on the international oil market and that's of course a concern," he said.
In a bid to secure future oil supplies the 10 members of the Association of Southeast Asian Nations (ASEAN), the European Union and India declared their intention to examine oil stockpiling.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. China was also urged to expand its modest stockpiles.
Tatsuo Masuda, from the Asia Pacific Research Center, said oil price surges as a result of supply disruption could most effectively be moderated by oil stockpiling but he added many economies would struggle to afford this.
"Only Japan, Korea, and Chinese Taipei maintain emergency oil stocks, while China, Thailand and some others are considering building them," he said, referring to the Asia region.
"Most of these economies face difficulty in building emergency stocks due to the financial constraints," he said.
Japan also secured separate oil agreements with Qatar, Kuwait and Iran, while Saudi Arabia reassured producers and consumers that OPEC was not about to enter an energy battle with Russia.
Russia is the world's second largest oil exporter after Saudi Arabia and is not a member of the OPEC cartel.
The forum was supposed to cover all aspects of global energy demand but the emphasis here has remained on a sharply lower oil price.
Lower oil costs would provide a fillip to flagging Western economies, particularly Europe, the United States and Canada ahead of the approaching Northern Hemisphere winter.