Jeddah Oil Meeting: A Chance for Serious Dialogue

  • 22 June 2008

The issue of “energy security” is the  top concern of governments around the world following the rapid increase in oil prices. As the world finds itself incapable of finding alternatives to fossil fuel, the crisis has been responsible in unleashing concomitant problems of similar, if not greater magnitude, like the food crisis that is effecting all countries, the poor and the rich.

Observers believe the Jeddah meeting being held today, to be  attended by oil-producing and oil-consuming countries of the world, as setting the trend for energy markets, which have seen a steady rise in prices to new historical levels of US $139.89 a barrel that has given way to several warnings over the security of world economy in coming times. Undoubtedly, this trend necessitates a more  responsible and mature effort by various parties to the oil equation. Cooperation and solidarity should replace competition and rivalry, and all sides should refrain from indulging in a blame game. They should try to find out and accept the real reasons behind the current problem and carry out their own responsibility in settling the problem.

Despite the mystery surrounding the position oil-producing countries might take at the meeting, the GCC countries could make a huge difference in influencing oil prices. Recent experience shows that a majority of GCC oil-producing countries have taken a highly mature and wise position on the issue of oil prices by increasing their production to stabilize oil markets and by seeking to achieve reasonable price levels that secure the interests of oil producers and oil consumers. They have sought to maintain oil prices to a level that oil-producing countries get an appropriate value for their oil exports that would enable them to invest their wealth in their development plans and promote oil exploration, maintenance and refining projects, and which in turn would provide adequate supplies to oil-consuming countries for meeting their development needs.

However, many new factors have started influencing world energy markets in recent years that have undermined efforts of oil-producing countries to strike a balance in crude oil prices. The role of oil market 'speculators' has increased in recent years. Some major oil-consuming countries have been negligent in taking appropriate measures to meet rising demand of oil, such as building new refineries  and lowering high taxes on petroleum. The Jeddah meeting offers a great opportunity to reach a middle ground and devise a common approach for solving the current oil crisis.