Saudi king urges consumers to get used to high oil prices
KUWAIT CITY (AFP) — King Abdullah of Saudi Arabia, whose nation is the world's number one oil exporter, called on consumer countries to get used to high prices in comments published on Tuesday.
"Consumer countries have to adapt to the prices and the mechanisms of the market," the king said in an interview published by the Kuwaiti daily Al-Siyassah.
"We have nothing to do with the current sharp increase in crude prices," he said reiterating the Saudi position that speculation, rising demand and the taxation of oil products in consumer countries were to blame.
"These countries must reduce their taxes on fuel.. if they want to contribute to easing the burden on ordinary consumers," he said.
Last month Saudi Arabia hosted a one-day conference between consumers and producers but the meeting failed to dampen the red-hot market.
Oil prices jumped beyond 142 dollars a barrel on Tuesday after OPEC president Chakib Khelil said there was uncertainty surrounding future investment in facilities to boost crude output.
"The concern we have is about the security of demand," Khelil, who is also Algeria's energy minister, told an energy conference in Madrid.
And there are "big uncertainties" about making huge investments in infrastructure to increase output from members of the Organization of Petroleum Exporting Countries, which pump about 40 percent of world oil.
Meanwhile the International Energy Agency (IEA) said growth in supply would outpace demand until 2010, after which the market would likely experience supply tensions.
An IEA report published on Tuesday also disagreed with the Saudi view that speculation was behind skyrocketing prices.
"Often it is a case of political expediency to find a scapegoat for higher prices rather than undertake serious analysis or perhaps confront difficult decisions," the IEA said.
"Blaming speculation is an easy solution which avoids taking the necessary steps to improve supply-side access and investment or to implement measures to improve energy efficiency."
But the Saudi king insisted that speculators were to blame.
"Anyone who pretends that a production increase will ease speculation is mistaken... speculators believe that prices will remain high," he said.
He also defended Saudi pricing policies saying "we propose our products on the international markets according to current prices, be they low or high."
King Abdullah also expected "oil demand to increase in the future in response to to economic growth levels" across the world, adding however that the Gulf has "enough oil resources to satisfy demand."
