Oil crisis could hurt world economy: OAPEC

OAPEC's Dr. Samir Elkareish says oil crisis is based on 'speculation'

The global oil price rise will be an important talking point at the upcoming Middle East Downstream Week in Abu Dhabi from May 8-11.
The global oil price rise will be an important talking point at the upcoming Middle East Downstream Week in Abu Dhabi from May 8-11.

The Organization of Arab Petroleum Exporting Countries (OAPEC)’s director of Technical Affairs, Dr. Samir Elkareish, says effective steps to avoid a future oil crisis must be taken.

Dr. Elkareish is one of dozens of high-level experts who will address the Middle East Downstream Week in Abu Dhabi from 8-11 May, where NOCs, IOCs, petrochemical producers, refiners, fuels marketers and distributors in addition to independent oil and gas experts and technology leaders will gather.

Oil crisis not a supply/demand issue

The global economic impact of the unrest in the MENA region, in particular Libya, and the resultant rise in the oil price, is expected to be an important point of the discussions at this event.

Dr. Elkareish says the risk to the global economy posed by sustained high oil prices is a factor that should not be overlooked: “If tensions in the MENA region die down quickly and the price of oil returns to pre-crisis levels, the global economic recovery will not be affected dramatically. However, if these movements spread, and a collection of countries see deep cuts in oil production, high oil prices could pose a real danger to the global economy.”

He continues: “Effective steps to avoid a future oil crisis must be taken. Since the basic problem is not based on supply and demand or free market fundamentals, but instead is based upon speculatively inspired psychological perception, remedial action based upon economic factors seems appropriate. The main oil producer, Saudi Arabia, must add additional spare production capacity to cover any loss of capacity elsewhere.”

Impact of international clean fuel standards on Arab producers

The largest refiners in the region will attend the Middle East Downstream Week in May where OAPEC’s Dr. Elkareish will specifically focus on clean fuels regulations and Arab countries’ strategies to improve refined product specifications, including current specifications of refined products in Arab countries and the expected time schedule for meeting international clean fuels standards. He will also address the main reasons why refiners in Arab countries are not able to meet international clean fuel standards in addition to plans already implemented for improving refined product specifications in Arab refineries.

Middle East Downstream Week is expecting more high profile experts from companies such as Abu Dhabi Oil Refining Company (TAKREER), Kuwait National Petroleum Company (KNPC) and Saudi Aramco.

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