The international oil prices continue to soar. On April 21, the
New York Stock Exchange reported that the price of light crude oil
exceeded US$75 per barrel, reaching US$75.15. On 24th, the price
went up to US$75.35, set a new record for the fifth time within one
week. The soaring oil price not only caused great concern from the
international community, but also became a hot topic in many
important international conferences.
The Meeting of G-7 Finance Ministers and Governors of Central
Banks was held on the 21st, which issued a statement on the rapid
rise in oil prices, expressing concern about the issue, urging
energy organs to increase investment in oil exploration,
production, energy infrastructure and refining capacity, and,
calling on all states to continue to improve energy efficiency and
energy diversification. The statement also called for increasing
the cooperation between oil producing and consuming countries,
disclosing in a more timely and comprehensive way the statistics of
oil production, consumption and stock data, and enhancing the
transparency of the oil market.
At the Boao Forum for Asia held in China's Hainan province on April 22nd, the delegates
gave an in-depth analysis and discussion on the international
energy market trends. They believe that the current oil prices are
well beyond their actual value and need to be controlled. Energy is
the engine of the world economic growth as well as one of the key
factors to sustainable development. To resolve the energy security
issues, in addition to strengthening oil exploration measures,
governments of different countries should attach importance to
energy saving so as to achieve a sustainable energy development in
the future.
The International Energy Forum which closed on 24th has the
theme as "The future energy security is a shared responsibility."
The Ministers of Energy from 55 countries generally agree that
given the volatility of the international oil market recently, oil
producing and consuming countries should strengthen the
constructive dialogue in search for a balance of supply and demand,
and establishing an energy security mechanism, so as to restore the
stability of the oil market and achieve a win-win objective.
Due to the unprecedented high oil prices in the market, all the
three important conferences took oil issues as their main agenda.
It is worrisome that the surge in oil prices has basically divorced
from the economic track. The Ministers of Energy who participated
in the International Energy Forum believe that the shortage of oil
supply does not exist; the geopolitical tension is the real reason
for the soaring price. At the moment, the United States and Iran
are in a conflict on Iranian nuclear issue, which made the oil
supply become the biggest bet. This is the direct cause to pushing
up oil prices. It was predicted that if the United States and Iran
had a clash in the Strait of Hormuz, the throat of the Persian
Gulf, it will trigger an oil supply crisis. Furthermore, Iraq's
political mire and the speculation in the international energy
market also added fuel to the flame.
Relevant experts believe that despite a slight drop in oil
prices over the past few days, the "turning point" has not appeared
yet. IMF Managing Director Rodrigo de Rato warned that the high oil
price is still a major risk for the global economic growth.
Although the world economy has been strengthened in terms of
resistance capacity, the endless rise in oil prices is likely to
exacerbate global economic imbalances, thereby increasing the
possibility of the outbreak of financial crises.
US President George W. Bush has ordered the suspension of
additional US strategic oil reserve on 25th to curb price
increases. Earlier, OPEC President Edmund Daukoru also said that
OPEC should increase its crude oil surplus production capacity in
order to stabilize the market and oil prices. However, these
efforts may not be able to get to the root. To restore the oil
price to a reasonable level, efforts should be made to eliminate
the non-market incentives, search for a peaceful solution to the
Iranian nuclear crisis, and, clear up the unstable factors in the
Middle East region.
(People's Daily Online April 30, 2006)
