The root causes of skyrocketing oil prices remained unclear at the World Petroleum Congress in Madrid this week, but one thing was becoming increasingly evident.
Access to “easy oil” will henceforth be “limited,” as Royal Dutch Shell chief executive Jeroen van der Veer put it, while BP boss Tony Hayward spoke of the era of “cheap energy” being over. The reasons for oil prices doubling within a year divided analysts at the congress bringing thousands of experts to the Spanish capital from Monday to Thursday.
“The reasons for the oil prices are a mystery,” said one official from the Algerian energy group Sonatrach, while Qatari Energy Minister Abdullah bin Hamad Al-Attiyah spoke of “strange market fluctuations.”
The ongoing “oil crisis” was seen as differing from previous ones in that its causes were more complex. Analysts attributed the soaring prices to a variety of factors ranging from the weak dollar to insufficient investments and refinery capacity, fuel taxes, the appearance of alternative energies, and conflicts such as the tension between Israel and Iran or militant attacks on oil pipelines in Nigeria.
One of the factors boosting oil prices is undoubtedly growing demand in developing countries, whose needs will amount to a quarter of today’s global production within two decades, according to figures given by Fu Chengyu, president of the Chinese National Offshore Oil Corporation.
Oil company representatives and the International Energy Agency (IEA) downplayed the role of market speculators, whom producing countries and some European politicians accused of inflating prices. Representatives of consumer countries expressed doubts over the availability of sufficient supplies, while their counterparts from the Organization of Petroleum Exporting Countries (OPEC) said there were oil cargoes that could not find buyers.
With alternative energies still playing only a limited role, the world will remain dependent on oil for decades to come, and analysts expressed confidence that new projects in Brazil, Russia, the Gulf of Mexico and even conflict-torn Iraq would add to supplies.
Many new reserves, however, are in deep waters or other sites of difficult access, which will make oil extraction increasingly expensive, experts said.
