The Opec oil cartel on Tuesday (28/02) hit back at President George W. Bush, criticising the US and other consuming countries for pursuing energy policies that threatened energy security and the global economy. Moving away from oil made it more difficult for producing countries to invest the billions of dollars needed to ensure enough output to meet future demand, the Organisation of the Petroleum Exporting Countries, the group that control s 40 per cent of world oil supplies, argued in the commentary of its monthly Bulletin magazine.

The group s comments came in direct response to Mr Bush s repeated calls for the US to reduce by 75 per cent its “addiction” to oil from the Middle East by 2020. European countries have also looked to encourage alternative fuels to oil, but have been less hostile to Opec and the Middle East, arguing it was unrealistic to believe consumers would reduce their dependence on the region that controlled the vast majority of the world’s oil reserves.

Opec said: “Alas, uncertainties are compounded by consumer government policies aimed at moving away from oil – moreover, oil from specific global regions – principally, as expressed by such consumers, for security of supply reasons.” The group argues that the only way to ensure security of supply is by ensuring security of demand. “If some players choose to break the circle, then this could ultimately affect security of both demand and supply and perpetuate volatility, to the detriment of the market as a whole, as well as other sectors of the global economy.

On Monday Mr Bush stepped up his side of the argument, saying: “I spend a lot of time worrying about disruption of energy because of politics or civil strife in other countries – because tyrants control the spigots. And it is in our national interest that we become less dependent on oil.” Many Opec members have suffered from insecurity and have recently seen their oil industries become targets of rebels and terrorists. Saudi Arabia, one of the US s most reliable suppliers, on Friday stopped a terrorist attack on Abqaiq, its biggest oil processing facility. Its huge security operations foiled the bombers and none of the kingdom s substantial exports was affected.

Meanwhile, Nigeria has had to shut down almost a fifth of its production because of rebel attacks in the oil-rich Niger Delta, while Iraq managed to export less than 1m barrels a day in January, the lowest level since shortly after the US invasion, as insurgents target its pipelines. Other Opec members have strained relations with the west and Washington in particular. Iran is at odds over its nuclear ambitions, while Hugo Chávez, Venezuela s populist president, has threatened to shut off exports to the US.
( FT, 28/02/06)
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