Until a few decades ago, oil policies reflected the interests of consuming countries and their major corporations. Then in the recent period, OPEC managed to take more initiatives to defend its own interests, and to deal in a more positive manner with the consuming countries. Perhaps the best expression of this new approach, but which does not invalidate the continued divergence of interests among these parties, is the establishment of the International Energy Forum (IEF), which held its twelfth meeting last week in the Mexican resort city of Cancun. A joint statement labelled the ‘Cancun Declaration' signed by 66 countries was issued following the meeting. The Cancun Declaration confirmed the commitment of IEF Countries to issuing a formal charter to convert the IEF into an international organization consisting of the signatory member states, with its official headquarters located in Riyadh. This declaration is expected to enhance the role of the forum and its activities, and to expand them in the direction of further transparency in what regards energy data and information. Officials from the major international oil corporations and from oil-producing countries, in the speeches they gave during their participation in the IEF's meeting, called for further stability in oil markets, whether through the adherence of producing countries to the investment terms and conditions in their petroleum contracts, or through urging the consumer countries to provide further transparency in what regards their future consumption of energy. This is so that the oil producing countries can better direct their investments. Of course, each official ultimately expressed the point of view of his or her country, be it an oil consuming or oil producing country. In light of the recent sharp decline in oil investments that accompanied the global financial crisis, Peter Voser, Chief Executive Officer of Royal Dutch Shell, said that the commitment by oil producing countries to stable oil investment policies helps restore the momentum of investments by oil companies in the oil producing countries. In truth, such views are being expressed amid fears of a future oil crisis in light of the postponement of several planned petroleum projects, whose delay will cause a disparity in the future balance of supply and demand, possibly leading to a big hike in prices. Also, Khaled Faleh, CEO of Saudi Aramco, warned against carbon tax schemes in consumer countries, because they might ‘lead to increased uncertainty' in the markets. The CEO of the largest oil company in the world also raised the alarm regarding the increased costs of the construction of projects, which he considered to be ‘very high'. Meanwhile, Chakib Khelil, the Algerian Energy Minister, warned of a possible decline of investments in the natural gas industry, should prices continue to go down. In turn, Mr. Helge Lund, CEO of StatoilHydro, called on the consumer countries to respond to the producing countries and allow the companies from the OPEC countries to invest there, just like OPEC allows the companies in consumer countries to invest in producing countries. It is noteworthy that some oil companies from the OPEC countries began investing in consumer countries since the eighties. However, these companies have encountered great difficulties in making profits, and even incurred major losses. Nevertheless, there is now renewed interest in such investments, in particular in the refining and petrochemical sectors in China and India, in addition to refining in the United States. But the latter is an extremely challenging sector to get into, given the restraints and strict regulations imposed on U.S refineries. On a different note, the OPEC ministers present in Cancun stressed that the stability of oil prices is the most important parameter in attracting investments. In truth, there is a broad understanding among the ministers regarding the importance of maintaining the oil prices at their present range, i.e., the range of 70 to 80 dollars. There are many reasons behind OPEC's interest in the stability of oil prices, not the least of which is the fact that these countries, whose annual budgets depend on oil revenues, are in dire need for price stability, in order to ensure that their budgets remain deficit-free. It should be mentioned here that many oil producing countries have adopted an average price of 50 dollars for oil this year. For this reason, the stability of oil prices at their present level will mean that there will be a surplus in the annual budgets of these countries. Moreover, the current price range is suitable for petroleum investments, which shrank in the second half of the last decade, because of the soaring costs of construction and services. Finally, it is in the interest of producers to have stable oil prices at a ‘reasonable' level, with which petroleum can compete with other energy sources that have now become ready to compete in global markets. In the market and the petroleum industry in general, the most important factor is the stability of oil prices at reasonable levels. In this regard, most of OPEC member states present in Cancun endorsed the current price level: 70 to 80 dollars. This level was reached following a difficult period, as oil prices plunged to around 30 dollars in early 2009, which means that the current level is about 160 percent higher than this low price level. However, the industrialized countries are not in full agreement with the countries of OPEC, and all what they want is to ultimately curb the major and rapid fluctuations in oil prices. *. Mr. Khadduri is an energy expert
