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TOKYO—The world faces an “oil crisis,” and the International
Energy Agency (IEA) stands ready to release emergency
stockpiles even as the biggest consumers discuss
measures to contain spiraling demand, the agency’s chief
said.
“Any
major oil-plant accident can cause a supply disruption,”
executive director Nobuo Tanaka said in an interview in
Tokyo. “We at the IEA are monitoring the oil market and
preparing ourselves to call for the release of strategic
petroleum reserves at any time in the event of a major
disruption.”
Consumption in
China
and India, the world’s fastest-growing major economies,
has helped drive crude-oil prices to “abnormally high”
levels above $130 a barrel, Tanaka said. The US, Japan
and 25 other rich countries advised by the IEA have
discussed stop-gap measures to reduce consumption,
including lowering speed limits and restricting cars in
cities, he said.
“We can
call it an ‘oil crisis’ given the current price, and
that it continues to climb even after global efforts to
cut consumption,” Tanaka said. “We see a critical,
structural issue in the global oil market, where supply
growth isn’t catching up with demand.”
Unlike
the oil crisis in the 1970s, which was driven by supply
restraints from the Middle East, the current situation
is fueled by soaring demand, the IEA chief said.
Speculative investment in commodities is also a driving
force behind record prices, he said.
Crude
oil futures have doubled in the past 12 months, and
investors looking to hedge against the dollar’s drop
helped push oil, gold, corn and gasoline to records this
year. Oil for July delivery was at $132.62 a barrel, up
$1.31, during the mid-afternoon session in Singapore
Wednesday in electronic trading on the New York
Mercantile Exchange.
The US
Commodity Futures Trading Commission (CFTC) set up an
interagency task force to evaluate developments in
commodity markets, including the role of speculators,
the commission said Tuesday. The CFTC held talks with
the UK Financial Services Authority about the
possibility of introducing limits on the positions
traders can take in
London’s
oil markets, the Financial Times reported Wednesday.
“I want
the CFTC to set new rules and regulations that will help
increase the transparency of the oil market,” Tanaka
said. “It’s necessary to some extent to find out who
invests what kind of money in which markets.”
Tanaka
will take part in the Group of Eight industrialized
nations’ finance ministers meeting this weekend in
Osaka,
Japan.
IEA
member-states are required to hold oil stockpiles
equivalent to no fewer than 90 days of the prior year’s
net imports. The agency calls on countries to release
emergency reserves of oil if supply is threatened.
In
September 2005, all IEA member-countries, in cooperation
with the EU, agreed to offer a total of 60 million
barrels of oil and oil products to the market within 30
days as a response to disruptions caused by Hurricane
Katrina, which hit the US Gulf.
US
Congress introduced a national speed limit of 55 miles
(88 kilometers) an hour, in effect from 1974 to 1984, to
conserve fuel in the face of the 1973 oil crisis. (With
reporting from
Singapore.
Bloomberg) |
