LONDON ø Gulf Cooperation Council states were being urged to
increase their crude oil capacity to compensate for the failure of Iraq to
return as a leading energy exporter.
A report by the London-based Center for Global Energy Studies warned that
GCC states must bolster their oil output to stabilize prices amid the Al
Qaida insurgency in Saudi Arabia and Sunni attacks on Iraqi oil facilities.
Without a major GCC oil increase, the international energy market could be
"After years of lackluster oil demand growth, with OPEC needing to keep
a tight rein on supply to maintain prices, the balance appears to have
shifted, with the organization now required to boost output to prevent
prices from rising to levels that would choke off future demand growth," the
energy center said. "The world has not seen the kind of demand increase we
are presently experiencing since 1976."
The center said OPEC has not kept up with the increase in demand because
of limited capacity. The report said the organization has underestimated the
strength of the oil market in 2004 and that OPEC's spare production capacity
will be quickly filled.