Eleven nations that guzzle nearly two-thirds of the world's energy yesterday called for an urgent hike in global oil production as host Japan warned the world could plunge into recession.
Energy ministers from the Group of Eight (G8) industrial powers met in the northern Japanese city of Aomori with officials from China, India and South Korea in the wake of a record spike in oil prices.
The 11 nations represented here voiced "serious concerns" over the level of oil prices and said there was an "urgent need for increased and timely investment in the energy sector".
In a joint statement, they called for boosts to their own production and asked major oil producers "to increase investment to keep markets well supplied in response to rising world demand".
The countries also agreed to establish a new framework – called the International Partnership for Energy Efficiency Co-operation (IPEEC) – under which they can share ideas about how to save energy. The first meeting is to be held this year.
The 11-nation talks came after crude oil prices on Friday posted their highest ever one-day gain of nearly $11, hitting a new record of $138.54 a barrel in New York trade.
"If we leave this situation as it is, it could lead to a recession of the world economy," Japan's energy minister Akira Amari said as he opened the meeting.
Oil prices have soared five-fold since 2003 due to a variety of factors, including turbulence in the Middle East and rising demand in emerging economies such as China and India. In a nod that they were not pinning all the blame on oil producers, the 11 nations said the oil market faced structural problems, including the growth of global demand, particularly in transportation.
The European Unions energy commissioner Andris Piebalgs warned high oil prices were a fact to be reckoned with and major economies needed to come up with alternative energy.
"The era of cheap energy seems to be over and no economy should gamble on a potential return to low prices," Piebalgs said.
"It is far better to make the right investments in clean, efficient energy technology and energy resources now, and to reap the benefit later."
The G8 groups Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.
Energy Minister Sergei Shmatko of Russia, the only major energy exporter at the talks, said: "We want to maintain our position as a stable energy supplier to other countries."
But his South Korean counterpart, Lee Youn-Ho, said current oil prices were at "abnormal" levels. "International co-operation is needed for stable supply of crude oil," he said, calling for innovative technology.
The talks in Aomori, a hub of Japan's nuclear energy industry 600 kilometres north of Tokyo, were one of a series of meetings leading up to the G8 summit on July 7-9, when climate change is expected to be a top issue.
The G8 nations said they support an earlier proposal of launching 20 large projects to bury greenhouse gas by 2010 for the technology's broad deployment a decade later.
Enough oil in market
The Organisation of the Petroleum Exporting Countries (Opec) members see no need to pump more oil in response to last week's double-digit surge in oil prices to over $139 a barrel that top exporter Saudi Arabia described as unjustified, a senior official said yesterday.
"I think there is enough oil in the market," Shokri Ghanem, head of Opec member Libya's National Oil Corporation, said. Top oil exporter Saudi Arabia is the only Opec member with capacity to boost output quickly and significantly.
But Saudi Oil Minister Ali Al Naimi and his Pakistani counterpart met yesterday and agreed that the price rise was unjustified and unrelated to market fundamentals, the official Saudi Press Agency reported.