As regional unrest continues to push the price of crude up oil importers and exporters agree to work together to limit volatility.
United front to keep crude in check
RIYADH // Oil importers and exporters have agreed to work together to limit price volatility even as regional unrest has propelled crude prices to a 30-month high.
Representatives from 87 nations yesterday signed a charter for the International Energy Forum (IEF), ushering in an era of increased co-operation between importers and exporters who have not always seen eye-to-eye in the past.
"What I think has been very absent in this market historically has been that sort of structure," said Charles Hendry, the UK energy minister. "So one's tended to have the producer countries separate from the consumer countries, and now it must be for the good of us globally that we are in the same room talking together about those issues."
The charter brings more influence to the IEF, a group founded in 1991 that has traditionally drawn its power from Opec and the International Energy Agency, which represents the interests of 28 oil-importing countries.
Even as Brent crude prices hovered above US$106, representatives from consumer countries in Riyadh yesterday held back from criticising Opec or calling on it to increase supply.
"Opec has been accepted way long ago, I think we went beyond that now," said Prince Abdulaziz bin Salman Al Saud, the assistant to the Saudi minister for petroleum. "They have passed these psychological barriers and they are beyond the notion of confrontation."
As prices have climbed amid Middle East unrest, oil ministers focused on the need to control price volatility.
"We consider the problem with prices - price volatility - as the key problem of the current markets, and we think that due to the forum we could find some solutions," said Yuri Sentyurin, the Russian deputy energy minister.
Part of the uncertainty about oil prices arises from a lack of agreement between energy importers and exporters about how much crude is on the market.
"The focus is really getting the data right," said Mohammed al Hamli, the UAE Minister of Energy. "Everybody says, Opec produces that data, IEA produces that data, but we want countries to be confident when they are actually involved."