ABU DHABI: The Saudi Minister of Petroleum and Mineral Resources, Ali bin Ibrahim Al-Naimi, headed the delegation of the Kingdom of Saudi Arabia to the 10th Arab Energy Conference which began today in Abu Dhabi.
The Saudi Minister thanked President His Highness Sheikh Khalifa bin Zayed Al Nahyan for his patronage of the conference, saying, “I would like at the outset to express my thanks and appreciation to President His Highness Sheikh Khalifa bin Zayed Al Nahyan, for supporting this conference. I also thank the government and people of the sisterly state of the United Arab Emirates for their warm reception and hospitality, and all those who contributed to the organisation of this conference, led by my brother and colleague, Suhail bin Mohammed Al-Mazrouei, Minister of Energy and President of the Tenth Arab Energy Conference, for their commendable efforts to make this conference a success.” “Thanks are also due to sponsoring and supporting Arab organisations and institutions, such as the Organisation of Arab Petroleum Exporting Countries (OAPEC), the Arab Fund for Economic and Social Development, the Arab Industrial Development and Mining Organisation, and the Arab League.” Speaking on the Kingdom’s petroleum policy and Arab cooperation at a time of change, he said that since the 9th Arab Energy Conference which was held in Doha, Qatar in mid-2010, there have been dramatic changes in the global economy which grew from about US$63 trillion to $77 trillion. Emerging countries, such as China, India and Brazil, have become increasingly important to the global economy and have come to represent about half of the global economy after they used to represent only 30%, the Saudi minister was quoted by the Saudi press agency, SPA, as telling the conference.
Economic growth in the majority of Arab countries has exceeded the global economic growth rate. Demand for oil has increased by about six million barrels per day, and oil prices stayed unprecedentedly stable from 2010 to mid-2014, he added.
“2014 has been a year of significant developments in the global economy and in oil markets. The year started with great optimism about the global economy and the growing demand for oil. Global economic growth and oil demand growth were estimated at 3.7% and 1.2 million barrels per day, respectively.” However, in the third quarter of the year, this optimism proved to be misplaced. Global economic growth did not exceed 3%, as economic problems continued to plague some key European countries, as well as Japan and Russia, and many emerging countries such as China, India and Brazil experienced lower-than-expected economic growth, according to him.
As for oil, the projected increase in demand was lowered to 700 thousand barrels per day. This fall comes as a result of the global economic slowdown at a time when oil production is increasing from several sources, such as shale, oil sands, ultra-deep water (below the salt layer), and some OPEC countries. These are mostly high-cost areas, but the high prices and technological developments over the past three years have contributed to the expansion of their production.
All these factors together have resulted in a steep and rapid plunge in oil prices. Saudi Arabia and OPEC countries have sought to restore balance to the market, but lack of cooperation from major non-OPEC producing countries, combined with the greed of speculators, contributed to the continued decline in prices, said Al-Naimi.