ROME (AFP) — The world's oil producers and consumers, gathering in Rome for the International Energy Forum this week, agreed that the market is well supplied, but held differing views of prices and the investment needed to meet long-term demand.
"We think the current level of production is enough and sufficient," said Nobuo Tanaka, head of the International Energy Agency, which represents the interests of oil-consuming countries.
The Organization of Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world's oil, agreed.
"There isn't much OPEC can do," said Iraqi Oil Minister Hussain Al-Shahristani, rebuffing repeated calls from countries such as the United States to open up the oil taps and alleviate price pressure.
"OPEC is producing as much as the market requires. As a matter of fact there's some surplus on the market."
An increase in output "is not going to solve the situation. The solution is in the hands of the speculators. They're the ones who are fixing the price, not the producers," Al-Shahristani said.
As oil prices surged past 118 dollars per barrel for the first time on Tuesday, some countries, such as Libya, Iran and Venezuela made it clear that they were not unhappy about current developments, since they stood to pocket higher revenues.
High prices were here to stay, not least because the production costs had risen, too, the countries argued.
OPEC's secretary general Abdulla Salem El-Badri estimated that production costs had risen by 50-60 percent in the last few years as a result of wage inflation and equipment costs.
"That's why oil prices haven't really been a boon to producers," he said.
Nevertheless, high oil prices could tip the world economy into recession, IEA chief Tanaka warned.
He said that oil prices, at their current levels, were "too high for everyone, especially for developing countries who face other significant costs increases", namely food prices.
British Energy Minister Malcolm Wick said: "Many of us feel that it would be a good thing for the world economy if prices were significantly lower than where they are at the moment."
Saudi Arabia's petroleum minister Ali al-Naimi called for calm.
"This is not the time to panic and grasp for exotic, unproven solutions," he said.
"I have observed an unprecedented level of uncertainty, doubt and even fear in discussions about the future of energy and its impact on global economic prospects," al-Naimi said.
But "I can assure you unequivocally that the world is not running out of oil," he insisted.
The root of the problem was primarily due to "limited capacity along the entire supply chain .... at its heart, this is not an energy resource issue; it is primarily an investment issue," he said.
OPEC announced that it planned to raise production capacity by five million barrels per day (bpd) by 2012 and by nine million bpd by 2020 from current output stands of about 32 million barrels per day.
The IEA's number two, William Ramsay, urged consumer countries to be more vocal in their concerns.
The IEF was a forum for dialogue between producers and consumers and "if consumers are concerned about prices, they probably should speak up," he said.
There was "a great deal of anxiety about prices, about the coincidence of high food and fuel prices, especially in the developing world," Ramsay said.
However, the IEF had not managed to identify the options for dealing with the problem, he added.
IEA chief Tanaka predicted the oil market would become "more balanced" in the short term as stocks were replenished.
The IEA is projecting world oil demand to slow this year, not least because of the economic slowdown in the United States. And with OPEC projected to hold output steady, that would enable stockpiles to be built up again.
But in the longer term, the IEA "wants to see more stockpiles and more spare capacity," because "low investment and low spare capacity are making the market very volatile," Tanaka said.
Saudi Arabia, the world's biggest oil producer and the only country to have significant spare capacity at its disposal, "is investing as expected" in infrastructure and production, Tanaka noted.
"But we can't expect them to do everything," he said.
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