IEA's Birol:Oil Becoming Political Weapon Is Dangerous-Report

Crude oil and natural gas are increasingly becoming tools for political pressure for producing countries, said Fatih Birol, chief economist of the International Energy Agency, in an interview published Friday in Germany daily Die Welt.
Dow Jones Newswires
Παρ, 23 Νοεμβρίου 2007 - 03:29
Crude oil and natural gas are increasingly becoming tools for political pressure for producing countries, said Fatih Birol, chief economist of the International Energy Agency, in an interview published Friday in Germany daily Die Welt.

"There has been a very dangerous trend in the past four, five years that oil and gas are increasingly becoming political instruments. This is bad news for global politics," Birol is quoted as saying.

He commented on a question referring to remarks made by Venezuela's President Hugo Chavez. Chavez said a speech at last Saturday's OPEC summit in Riyadh, Saudi Arabia, that the Organization of Petroleum Exporting Countries must echo its values at the time of its creation and "assert itself as an active political agent."

Birol also said he doesn't think that speculation is the main driver of increasing oil prices. Speculation only intensifies a situation that emerged in light of "scarcity and geopolitical risks", the paper quotes him as saying.

Birol added that western oil companies, whose oil reserves are declining, are in an "identity crisis" and are at risk of losing their basis for business, projecting "very serious difficulties" for the oil majors in coming years.

"There are huge reserves but these predominantly are located in countries of the Middle East," Birol said, adding that western oil companies don't have access to those reserves.

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