Energy leaders from all across the globe could not have met at a better and a more opportune time. All last week, it was energy diplomacy at work — in fact overtime!
If at any time in recent history, there has been an urgent need for the energy fraternity to sit around and — and not across the table — it was at this very moment. Not that it was planned this way. The dates for the 10th IEF moot of the energy ministers from all across the globe, was set long, long before. Yet it was destined to coincide with global crude prices conquering new, historical peaks.
And thus when energy ministers from 59 countries, six global energy organizations, and 32 leaders of global energy majors met at Doha earlier this week, a wide range of issues related to energy resources and markets, investments in the energy sector and improved frameworks for cooperation were reportedly discussed.
However, as crude prices scaled new historic heights of $75 a barrel, just before the onset of the meeting, wittingly or unwittingly, the galloping oil prices turned out to be the focus of attention. Ambassador Arne Walther and his team of energy diplomats perhaps may not have wanted this prime congregation of global energy leaders to stay obsessed with the immediate issue of market prices. There were indeed other issues, equally important, which required consultation and cooperation and the attention of the global energy leaders, they may have felt. Yet the dynamics were already charged.
Energy today, in some terms dictates global diplomacy. To a great extent, it determines, what could easily be described as, “the new world order.” Many thus today say and indeed not without reason that whether it’s the proposed US nuclear agreement with India, tension over a natural-gas pipeline from Russia to Europe or the Iran-Pakistan-India gas pipeline, or talks between President George W. Bush and Chinese President Hu Jintao about China’s growing ties to Iran, the Chinese president’s subsequent visit to Saudi Arabia and also to energy rich Nigeria, it becomes evident that the world leaders are factoring crucial energy needs into their strategic calculations. “Energy considerations underlie international politics today more than any other issue and are at the root of every country’s international behavior,” says Gal Luft, co-director of the Institute for Analysis of Global Security in Washington.
However, so intense was the diplomatic flurry in the energy corridors over the last few days that the Saudi oil minister, otherwise eagerly awaited at Doha- being the virtual mover and shaker of the energy world - had to stay back in Riyadh due to the visit of the Chinese president. He could only make a dash to Doha on Monday morning, the last day of deliberations of the Forum. Indeed energy was one of the major subjects of discussion between the leadership of the two countries, as was also evident from Jintao’s visit to Dhahran, the virtual global energy capital. Minister of Petroleum and Mineral Resources Ali Al-Naimi was thus required to be here too, as a key member of the Saudi energy team. There were competing, intense demands on his time and indeed so are the demands of his job.
However, one thing is increasingly becoming clear; the OPEC alone cannot do much to ease the situation. OPEC is openly admitting it. According to some reports there is not much fervor within the OPEC ranks now to renew the offer of an additional 2 million barrels a day on the table that no one took, when it was earlier offered last September. The offer was subsequently withdrawn by OPEC beginning this year. OPEC is now speaking, with almost unison on the issue, that there are no takers for this additional volume, underlining the fact that factors other than supply constraints are responsible for the recent bullish run in the crude markets.
The Doha meeting thus rightly called for stepping-up of investments across the energy chain to meet the substantial increase in energy demand required for global economic growth and social development in the years ahead. Along with new investments, technology would also play a key role in helping to meet future energy demand, by increasing and diversifying energy supplies, improving energy efficiency and reducing project costs, it was underlined.
An interesting realization of the 10th IEF moot was the realization that it would be helpful to reduce, whenever and (wherever) possible, the effects of political elements in the energy industry. This becomes all the more important when seen in today’s charged perspective.