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IEF Takes on Oil Price Volatility

The 12th International Economic Forum meeting was held in Cancun, Mexico on March 30-31, 2010. The IEF is an assembly of oil producers and consumers. According to the IEF web site:

“The International Energy Forum (IEF) is the world’s largest gathering of Energy Ministers. IEF Countries account for more than 90% of global oil and gas supply and demand. In addition to IEA and OPEC countries, transit states and key energy players, including Brazil, China, India, Mexico, Russia and South Africa, participate in the Forum. The magnitude and diversity of this engagement is a testament to the IEF’s position as a neutral facilitator. Through the Forum and its associated events, IEF Ministers, their officials, energy industry executives, and other experts engage in a dialogue of increasing importance to global energy security. The IEF and the global energy dialogue are promoted by a permanent Secretariat of international staff based in the Diplomatic Quarter of Riyadh, Saudi Arabia.”

The 12th IEF “Concluding Statement” is HERE.

FT.com reporter Carola Hoyas (in this video) noted that “the dramatic oil price volatility of 2008 has united many delegates. Even major consuming countries now believe oil prices should not be left to market forces alone.”

“I think that what is no longer taboo in the dialogue is talking about everything, including prices,” said IEF Secretary General Noe van Hulst, adding, “Nowadays if you are talking about investment, if you’re talking about the demand/supply balance, medium term, you also need to talk about what kind of conditions, including what kind of prices are necessary in order to foster investment.”

However, Hoyas reported that U.S. government officials and energy executives “continued to insist that market intervention was not a solution.” ExxonMobil CEO Rex Tillerson said, “The way we built our business is around how do you invest in resource development when you don’t know what the price of the commodity is going to be. And that really is the case. We don’t know what the price is going to be when we invest in a deep water oil resource today that will produce in 2014. Is somebody going to tell me what the price of oil is going to be? For us we’re not as troubled by that and that was some of the discussion today. I know for governments it can be a real problem because they don’t know how to budget. Governments don’t have to be nearly as flexible as we have to be. The truth of the matter is we don’t spend a lot of time agonizing over what the price is going to be.”

You can view the FT.com video HERE.

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One Response to “IEF Takes on Oil Price Volatility”

  1. SUSRIS Saudi Arabia United States Relations Information Quarterly Summary says:
    April 5, 2010 at 11:37 pm

    [...] IEF Takes on Oil Price Volatility – Mar 31 [...]