St. Pete forum gives oil and gas forecast

The International Economic Forum in St. Petersburg has started its work a day before the official opening with heated discussions on the world fuel and energy issues.

The future of the oil and gas industry appears in an entirely new perspective amid the developments in the Middle East and North Africa, following Japan’s nuclear disaster and the shift of accents in nuclear energy development by a number of European countries. At the forum, the International Energy Agency presented a mid-term review of the global oil and gas market. Its spokesman David Fyfe said that oil prices will remain high until the end of the year - over $100 dollars per barrel. Their further fluctuations will depend on such factors as demand behavior in developed countries, the situation in Iraq, the exploitation of oil pipelines and refinery capacities. The demand will mostly grow due to China, Asian markets as a whole and the Middle East.

The International Energy Agency assessed that oil supplies to OPEC countries have grown by 200,000 barrels per day since the beginning of the year. According to General Director of the Russian National Energy Security Foundation Konstantin Simonov, the main paradox of the present-day oil world is that this year, OPEC members will earn big money - over a trillion dollars, but the record income will fall within the year of this organization’s alleged collapse (2012). The main problem is that OPEC member states ceased to obey their leader, Saudi Arabia:

"Saudi Arabia plays a key role in the global oil market but it can hardly influence its OPEC partners. It therefore single-handedly makes decisions on either reducing or boosting oil production," Konstantin Simonov said.

Complicated transformations are becoming a common thing as regards global gas supply as well. According to IAE assessments, gas consumption may increase by nearly 30 billion cubic meters following the failures at the German and Japanese nuclear power plants, while the annual consumption is expected to grow 2.5 percent over the next five years. Germany will need 16 billion cubic meters to make up for its losses.

In the course of debates at the St. Petersburg economic forum, participants touched upon issues of non-traditional gas types, including shale gas and liquefied natural gas. Russia has already ensured its LNG presence in Asia. The “Russian Davos” also considered energy outlooks and the development of renewable energy sources, like solar power.

By Oleg Nekhai

The Voice of Russia, June 16, 2011