06/04/2011
Kingdom, UK vow stability in oil market
Prices hit all-time high in Britain
Saudi Arabia and the United Kingdom have pledged to stabilize the oil market after oil prices hit all-time high in the UK in a surge that increases pressure on oil consumers globally.
The pledge to check prices and to ensure greater understanding between consumers and producers was made following talks between Ali Al-Naimi, minister of petroleum and mineral resources, and Chris Huhne, the UK Energy and Climate Change secretary, in Riyadh on Tuesday.
“Al-Naimi and myself shared common views that there is no shortage of supply and hence there is no reason behind the soaring oil prices, which hover round $115 to $120 a barrel today,” said Huhne, addressing a press conference. British Ambassador Sir Tom Phillips was also present.
Huhne ruled out the possibility that strained relations between the GCC and Iran, which have further worsened in recent weeks, would have affected the oil market.
“The GCC and Tehran have had no fraternal relations even in the past,” he said, calling on international energy markets to recognize that the high oil price does not reflect the realities of supply and demand in the market.
Huhne flew to Riyadh on Tuesday on a dual mission to address soaring oil prices and discuss how British firms can help the country develop its renewable energy base.
Asked whether political unrest in the region and the disruption in war-torn Libya could have led to the increase in prices, Huhne said everyone should do more to stop crude prices rising. The Kingdom has increased its oil output, but OPEC as a group has not changed its ceiling.
In a statement released earlier, Huhne denied that there was a global shortage of oil and insisted that consumer demand could be met despite problems in the Middle East.
“There is no shortage of supply, and yet the price has remained high,” he said. Asked about the impact of a weaker pound that has declined 17 percent in value in the past two years, he said that the increase in oil prices should not be linked with Britain.
The Bank of England is taking all necessary measures to check inflation, he added.
On his arrival in Riyadh, Huhne also met Hashim Yamani, chief of the King Abdullah City for Atomic and Renewable Energy, to discuss opportunities for UK companies as Saudi Arabia looks to expand its renewable energy sector. He also spoke about Britain’s safety review in response to the Japanese nuclear crisis that will delay approvals for new reactors to be built in the UK.
Huhne will fly to Abu Dhabi Wednesday to present the case for international collaboration in the development of carbon capture and storage technologies at the second Clean Energy Ministerial Forum, which begins Wednesday.
The UK is thought to have significant potential for storing carbon dioxide from power stations under the North Sea, and the industry is predicted to grow to over £10 billion by 2025.
