RIYADH, June 21 (Xinhua) -- Saudi Arabia, the world's top oil exporter, is
to host an international energy conference on Sunday to discuss ways to brake
the free-wheeling rise in oil prices.
The meeting, to be held in the Red Sea city of Jeddah, will gettogether
world's major oil producers and consumers as well as leaders from big oil firms
and international organizations. Chinese Vice President Xi Jinping, U.S. Energy
Secretary Samuel W. Bodman, British Prime Minister Gordon Brown and Secretary
General of the Organization of Petroleum Exporting Countries (OPEC) Abdullah
al-Badri are among the expected participants.
As an oil exporting giant, Saudi Arabia undoubtedly has accumulated
enormous fortune from the price hikes. So questions may arise on why it is so
enthusiastic for such a meeting.
TO EASE PRESSURE, SHOW DETERMINATION
Saudi Arabia, with over one-fifth of the world's oil reserves, wants to use
the upcoming meeting to respond to the mounting criticism that the country has
not done enough to boost production capacity further.
The Asian country is now under unprecedented pressure as the world's oil
prices have witnessed historical highs time and again in recent months. The
prices have more than doubled in a year to nearly 140 U.S. dollars a barrel,
triggering protests worldwide and concerns over its damage to world's economic
growth and energy security.
Some oil consuming countries said the situation has largely resulted from
supply shortage, and they have blamed OPEC for refusing a production increase.
In the United States, the world's top energy consumer, the lower house of
parliament adopted a bill in May which authorizes the U.S. government to sue
OPEC for controlling oil prices.
Saudi Arabia, under such a pressure, has to do something to show the world
its determination to maintain stability at the oil market.
The country will do everything it can to bring "abnormally high" oil prices
to "adequate levels," Saudi King Abdullah bin Abdul-Aziz told U.N. Secretary
General Ban Ki-moon last week.
As its latest effort to show the world that the country is a responsible
exporter, Saudi Minister of Petroleum and Mineral Resources Ali Bin Ibrahim
al-N'aimi confirmed Friday that the kingdom will be pumping 9.7 million barrels
per day (bpd) of crude in July, an increase of 550,000 bpd since May and the
highest daily output since August 1981.
TO BOOST COOPERATION BETWEEN CONSUMERS, PRODUCERS
OPEC members, rejecting the accusations from the consuming countries, have
blamed speculators for inflating oil's rally and adding volatility to the trade.
They have demanded further regulation of future markets to give a blow to
They also attributed the price hike to the weaker dollar and escalating
geopolitical tension rather than the imbalance between supply and demand.
The soaring prices for crude actually can not always be a blessing for
those exporters, although they have earned great fortune from the business.
As some of the world's major economies, including the United States,
Euro-zone countries and Japan, have seen a remarkable slowdown in their growth,
the skyrocketing oil prices are likely to hinder their economic development and
thus spread the sluggishness to the rest of the world due to the globalized
If so, oil exporters, including Saudi Arabia, will also suffer.
From a long perspective, soaring oil prices will undoubtedly force the
importers resort to alternative energy. When someday they become less dependent
on crude oil, it will do no good to Saudi Arabia and its OPEC counterparts for a
Saudi Arabia, which has a bigger say in OPEC, hopes that the Jeddah meeting
could promote the dialogue and coordination between exporters and producers
instead of blaming each other.
According to ArabNews, a Saudi local newspaper, the conference is expected
to focus on how and to what extend speculators matter in the prices hike and how
to curb their activities in crude trade.
TO CURB INFLATION, INCREASE INFLUENCE
Saudi Arabia's domestic situation also requires some actions.
As the world's prices for food and other resources also move upward boosted
by the oil price hike, Saudi Arabia, which has to import everything except crude
oil, has witnessed an inflation jump. In April, its inflation hit 10.5 percent,
the highest in 27 years.
From the geopolitical perspective, Saudi Arabia, whose economic power has
been accumulated amazingly in recent years due to the inflow of dollar earned in
oil trade, wants to promote its influence at both regional and international
arenas, and the upcoming energy meeting serves an opportunity to play its