DEAD SEA, 22 May 2005 — President of the Organization of Petroleum Exporting Countries (OPEC) Ahmad Fahd Al-Sabah yesterday asserted the producing countries’ keenness on the “stability” of the world economy by responding to movements of the world demand for crude, despite what he termed as diminishing linkage between world growth and oil prices.
Addressing a plenary session of the World Economic Conference (WEF) meeting here, Ahmed, who is also energy minister of Kuwait, expressed readiness of the Arab countries in the Gulf to involve themselves in the region’s sustainable development, but said “others should help in boosting stability of the region”.
“OPEC is keen on the growth and stability of the world economy through permanent communication with consuming countries and firms with a view to arriving at just crude prices that take into account the investments committed by member states to shore up their production capacities,” he said.
Ahmad reported a recent “change in OPEC’s production culture” that focuses on increasing investments in oil industry particularly the downstream operations.
“Two persons cannot differ that there is direct relationship between oil prices and growth of world economy, but the experience of the last quarter of 2004 indicate that the world economy was growing at a rate of four percent while crude prices were going up,” he said.
He pointed out that OPEC raised its output ceiling by four million barrels a day in 2004 to ensure “crude flows and stability of world markets
“But at our meetings in Asfahan and Cairo we started to adopt a new approach that focuses on stockpiles and we succeeded in quelling fears of producing countries that a big increase in demand will take place in the fourth quarter of 2005,” he said.
Turning to the theme of the WEF conference, “Seizing the Moment” to shore up economic development in the Middle East, the OPEC chief said he saw this target being accomplished through “reforming the education system” and investing surplus petrodollars in productive projects in the region.
“But as far as we are concerned in OPEC, we can utilize our experience in building petrochemical industries and refineries as well as investing surplus revenues in boosting sustainable development in the region,” he said.
“However, the world has to help us not only in terms of transfer of technology and experience, but also in maintaining stability in the region, which is vital for the whole world,” he added, alluding to the situations in the Palestinian territories and Iraq.
