IEA criticises OPEC decision not to hike output

PARIS (Thomson Financial) – The International Energy Agency tacitly accused OPEC Friday of increasing pressure on a vulnerable world economy by its refusal to pump more oil to help bring down crude prices.

‘While the Organisation of Petroleum Exporting Countries has decided to leave output unchanged, crude oil supplies remain very tight, as the IEA has noted for the past six months,’ the Paris-based agency said in a statement.


‘Very high oil prices may be adding additional pressures to currently significant economic risks,’ the statement said. The IEA represents the interests of oil consuming countries.

The oil cartel at a special meeting in Vienna on Friday argued that a financial crisis triggered by the subprime mortgage sector in the United States, rather than a lack of oil, was the most pressing problem for the global economy.

‘I don’t think the world should be concerned about a lack of oil. It should be more concerned about the financial crisis we are witnessing and its impact on world growth,’ OPEC conference president and Algerian oil minister, Chekib Khelil, said.

And the 13-member cartel said: ‘In view of the current (supply) situation, coupled with the projected economic slowdown … current OPEC production is sufficient to meet expected demand for the first quarter of the year.’

The IEA disagreed.

Forbes