x Abu Dhabi, UAEWednesday 26 July 2017

G8 to set up new oil summit

The Group of Eight (G8) leading industrialised nations will set up a new oil producers and consumers' summit.

Gordon Brown, Britain's prime minister, left, talks with Saudi Arabia's Foreign Minister Prince Saud Al Faisal.
Gordon Brown, Britain's prime minister, left, talks with Saudi Arabia's Foreign Minister Prince Saud Al Faisal.

The Group of Eight (G8) leading industrialised nations will set up a new oil producers and consumers' summit in a bid to avoid further oil price spikes. Gordon Brown, the British prime minister, said the forum would be held in London in December. The meeting would continue a process started during similar consultations last month in Jeddah, Saudi Arabia, and would take forward recommendations on energy security and climate change emerging from the ongoing G8 summit in Toyako, Japan.

"We have decided on an energy forum that will be convened by the Japanese over the next few weeks," Mr Brown told reporters on the sidelines of the G8 meeting yesterday. "It will feed its recommendations into the consumers/producers dialogue that we are having in London." Stephen Harper, the prime minister of Canada, said the G8 wanted to bring oil producing and consuming countries together to discuss how to avoid "rapid escalations" in price.

A G8 official said the group's leaders felt it was not enough to say they were concerned about oil prices. "They felt they had to indicate action would be taken," the diplomat said. The G8, comprising Japan, Britain, Canada, Germany, France, Italy, Russia and the US, also said it planned to stage a forum on energy efficiency and new technologies. At a parallel summit in Kuala Lumpur yesterday, a group of eight developing Muslim nations - Iran, Indonesia, Egypt, Malaysia, Turkey, Pakistan, Nigeria and Bangladesh - called for urgent measures to increase supplies of oil and food. At the meeting, Malaysia and Indonesia, the world's leading palm oil producers, also urged an end to the use of arable land for biofuel production.

"We must not allow the zeal for energy security to come into direct conflict with the basic needs for food production," said Abdullah Ahmad Badawi, the Malaysian prime minister. Indonesia, the world's most populous Muslim nation, said the recent surge in rice prices would mean that many people in the developing world would have less to eat. "We must act on it at once and in concert," Susilo Bambang Yudhoyono, the Indonesian president, told the Kuala Lumpur meeting before flying off to Japan as a guest of the G8 summit. "To delay action on this great challenge of our time is to court disaster."

The G8 leaders agreed that rising oil and food costs are threatening the global economy by stoking inflation, especially hurting the poor. "The world economy is now facing uncertainty, and downside risks persist," the group said in a statement issued yesterday, day two of the three-day meeting. "We express our strong concerns about elevated commodity prices, especially of oil and food, since they pose a serious challenge to stable growth worldwide."

The G8 leaders called on oil-producing nations to increase short-term production and refining capacity and to invest more to bolster medium-term supplies. They urged oil-consuming countries to improve energy efficiency and to diversify their energy sources. Promising to take "appropriate actions, individually and collectively" to ensure global economic stability and growth, the group nonetheless stopped short of recommending specific measures to curb commodity prices, such as tighter regulation of speculative trading or concerted action to boost the value of the US dollar. Dollar weakness has been widely blamed for this year's doubling of crude prices to more than US$140 per barrel.

Instead, the leaders highlighted the need for greater oil market transparency, arguing that more clarity would improve the supply/demand balance. "We need to improve collection and timely reporting of market data on oil and share analysis of oil market trends and outlook," the statement said. In a related development yesterday, the G8 leaders agreed on a "vision" of reducing global carbon emissions by at least 50 per cent by 2050. They said each nation would set its own interim targets for curbing greenhouse gas emissions during an unspecified period after the 2012 expiry of obligations under the Kyoto agreement on climate change.

Fossil fuel consumption has been widely blamed for rising atmospheric levels of carbon dioxide and other greenhouse gases that have been linked to global warming. Environmental groups called the G8's emissions resolutions toothless. tcarlisle@thenational.ae