During the last 12 months the world has witnessed a remarkable turnaround in the oil markets. Having plummeted to below $10 a barrel in February and March 1999, oil prices rebounded sharply so that a year later Brent crude oil was trading at over $30 per barrel before easing back to around $25 a barrel at the end of April 2000.
This dramatic turn of events could not have been achieved without the concentrated efforts of the GCC member states, in cooperation with other oil producing countries, to work towards a better balance between global supply, demand and stocks.
These efforts underscore once again what can be achieved through constructive cooperation not only between producers but also between producers and consumers as well.
Although the 21th century is only several months old, the events of the past year foreshadow the critical role that oil, and the GCC states in particular, will play in the global energy economy in this century for several fundamental reasons.
First, oil and fossil fuels are not going to be replaced by new energy sources in the near future. The International Energy Agency's latest World Energy Outlook projects fossil fuels to meet 95 percent of new energy requirements up to the end of their forecasting period of 2020.
Secondly, as the IEA stresses in the same report, the oil importing countries dependence on supplies from the Middle East will grow at least until such a time as unconventional sources are identified and become cost competitive.
The GCC producers' resource endowment and cost base compared with most other parts of the world dictate by simple economics that our role in securing growing consumer needs must increase.
Thirdly, the GCC has a long and established track record of accepting its responsibility for moderating disruptive price volatility and balancing the physical needs of the global markets during normal times and crises.
This policy works to the benefit of both consumers and producers who share the need to minimize market risk.
Of course the GCC and other oil producing countries cannot achieve this balance alone but require the good will and cooperation of consumers as well, to ensure that their policies do not militate against our efforts.
The oil industry faces many new challenges in the coming decades, not the least being to ensure that oil production capacity is sufficient to meet consumer needs.
This daunting task must be tackled in a climate of increasing globalization of the oil and other industry, continuous cost pressures and environmental sensitivities.
These are some of the issues to be considered in the spirit of forging a partnership with the GCC to achieve common goals.
By: Anwar Y. Al-Abdullah
© 2000 Mena Report (www.menareport.com)