Gulf states urged to ensure oil supplies

Gulf states urged to ensure oil supplies

ABU DHABI (AFP): Gulf states need to ensure stable oil supplies for Japan and other Asian countries to grab a bigger share of the fast-growing energy market in the continent, a Japanese expert said on Saturday.

Asian oil consumers are already heavily reliant on crude from the Middle East despite their abundant coal and hydrocarbon resources and they could become more dependent because of the rapid growth in their consumption, said Keiichi Yokobori, director of the Institute of Energy Economics.

"Whether market opportunities for the Gulf oil companies can be further expanded depends on several factors," he said in a study presented at an international oil conference which opened in Abu Dhabi on Saturday.

He said such factors included prospects for the continuous expansion of Asian economies, growth patterns of the differing economic sectors, such as transportation, competition with other fuels such as oil from other regions, natural gas, nuclear-based electricity, and coal prices.

"In particular, this means providing stable and sufficient oil supplies to meet the Asian customers' requirements at affordable prices," he said.

"This includes the provision of a safe and secure logistical infrastructure to the distant customer and the reciprocal participation in both upstream and downstream operations to secure mutual business interests.

"It also includes development of a transparent pricing scheme, greater exchange of goods, services and technologies in a broader context and appropriate actions to safeguard the environment... coupled with the energy deregulations occurring in Asian markets, exercising such options could enhance the access of Gulf oil to the Asian market."

Japan, one of the biggest oil consumers in the world, is the main importer of Gulf crude, receiving from the region nearly 70 percent of its total oil needs. The level is set to increase in the coming years as its consumption is steadily growing and the Gulf controls nearly 60 percent of the world's oil.

As other supply sources are dwindling because of their relatively small reserves, Japan has sought stable, long-term crude supplies from Gulf Arab states. In turn, they have asked for Japan's help in acquiring technology needed to ease their reliance on volatile oil export earnings.

Japan alone imports nearly 2.8 million barrels per day (bpd) of oil from the Gulf Cooperation Council (GCC) states -- Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates (UAE). Such supplies accounts for around one fifth of the GCC's total crude exports.

South Korea is the second biggest Asian consumer of Gulf oil, followed by Thailand, Malaysia, Singapore and Hong Kong. China, the most populous nation, is increasingly becoming reliant on crude imports from the Middle East as its production could no longer match its fast-growing consumption.

Keiichi, also president of the Asia Pacific Energy Research Center, said energy consumption in East Asia would continue to grow rapidly.

"Because of higher economic growth and the larger population size, the energy demand in Asia, in particular in East Asia, continues to grow at faster rates than that of other regions ... this situation is expected to continue into the next century," he said.

"The growing demand will eventually increase the region's dependence on external sources, in particular the Gulf area. The recent transition of China from oil exporter to a net importer is symptomatic in this regard."