• by IPS Correspondents (hong kong)
• Thursday, November 24, 1994
• Inter Press Service

HONG KONG, Nov 24 (IPS) - The centre of gravity of the world oil market has shifted from the Western industrialised countries to Asia, say energy industry analysts here.

But Asian governments are worried that this means increasing dependence on the Organisation of Petroleum Exporting Countries (OPEC), particularly the Middle Eastern producers that supply 75 percent of Asian imports of oil.

Including Japan and Australasia, the Asia-Pacific is now the second largest oil consuming region in the world with a total demand of 15.9 million barrels per day last year.

By the turn of the century, it is projected to overtake the United States to become the largest oil consumer in the world, says regional economist Ranjan Pal, who is also a director at Jardine Fleming Brokering in Hong Kong.

But he warns that Asia itself is has become more vulnerable than other regions to threats of higher oil prices or supply disruptions.

Last year, more than 70 percent of the oil consumed in Asia was imported, and the figure is projected to climb to 85 percent by the year 2000. Three-fourth of the imports come from the Middle East, and this may rise to 90 percent by the end of the century.

"In terms of security of supply, Asia will be in an even more precarious situation should there be another disruption like the Gulf War," says Pal.

"OPEC will be critical for Asia and Asia will be critical for OPEC," former OPEC secretary general Subroto also said this week at the organisation's 97th conference in Bali.

Fast growing Asian economies are expected to be instrumental in propping up flagging OPEC oil prices, giving them some bargaining power over the price tag slapped on the commodity.

Conversely, however, any dramatic rise in OPEC prices could severely affect growth prospects in Asia because the region's own oil production is unable to keep up with its rocketing demand. Last year alone, Asia accounted for almost a quarter of the world's demand for oil but supplied just a bit more than 20 percent of it.

In addition the supply and demand imbalance is widening rapidly with consumption growing at 4.7 percent a year in the last decade, running far ahead of output growth of 2.7 percent.

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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