Saudi Arabia's Oil Minister Ali al-Naimi said oil prices would remain near record levels as long as geo-political tensions with Iran, Iraq and Nigeria continue.
"There is nothing [that] can be done about the tension that has been created in the world today. Until that tension abates the price will be high," Ali al-Naimi told reporters on arrival in Doha, Qatar yesterday for an energy forum. "Nobody is asking for additional crude."
"The reason for where the price is today is not due to a shortage of supply. The fundamentals are sound," he said.
Officials from oil producing and consuming countries are holding biannual talks on world energy supplies after crude prices reached a record US$75.35 a barrel in New York last week. A further US$10 increase would replicate in inflation-adjusted terms oil costs of 1981, when consumer prices were rising by about 10 percent and interest rates soared.
The energy ministers of the US and Iran are also attending the three-day event, which opened in Doha on Saturday.
Mounting political tensions between the two countries over the Islamic nation's nuclear research have helped push oil up by as much as US$15 a barrel, Kuwaiti Oil Minister Sheikh Ahmad Fahd al-Sabah said in Doha yesterday.
"The geo-politics account for US$10 to US$15 a barrel," Sheikh Ahmad said.
The Kuwaiti official's proposal that OPEC should offer all its idle oil to the market has been "well received by some members," he said.
"As Kuwait, we support bringing the 2 million back to the market," Sheikh Ahmed said.
OPEC last made the standby oil output available last September in the aftermath of Hurricane Katrina, which devastated the US Gulf coast, and then suspended it three months later.
Meanwhile, oil prices slipped off record highs above US$75 in Asian trade yesterday on profit-taking after the market's unprecedented advance last week.
The market's slight cooling came after global finance chiefs called for action against runaway oil prices and in reaction to Kuwait's proposal to reactivate the standby capacity.
Oil prices are about 80 percent higher than in January last year and more than three times the level of four years ago, fueled also by strong demand from China and India, whose economies are booming.
Iran insisted on Sunday it would continue sensitive nuclear fuel cycle work despite the UN Security Council's deadline this week for it to freeze uranium enrichment.
The market is concerned crude supplies from Iran would be severely disrupted in the event of any military action by Washington. The Islamic state exports about 2.7 million barrels of crude per day.
Aside from Iran, the market is concerned with tight gasoline supplies in the US and the situation in Nigeria where 20 percent of its crude output remains offline following recent rebel attacks on the country's energy installations in the Niger Delta.
Nigeria is Africa's biggest crude producer.
Separately at meetings ending in Washington on Sunday, global finance chiefs called for action against runaway oil prices.
G7 finance leaders -- representing Britain, Canada, France, Germany, Italy, Japan and the US -- agreed the global economic outlook remained favorable but warned that oil prices were a menacing cloud on prospects.
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