Western nations need to do more to bolster their economies and stem unemployment, said the head of Opec.
The spectre of a double-dip recession in the US and political deadlock over the European debt crisis is threatening oil producers, said Abdulla el Badri, the secretary general of Opec.
"It's really hampering the demand for oil," he said today in Dubai. "That stimulus package is not really working. Something must be done to introduce new manufacturing, new activities [so] it can solve unemployment."
Producers and consumers alike have notched down their forecasts for oil demand growth over the next two years amid the grim economic outlook.
Opec needs to revive discussions with China about its future energy needs to get a better assessment of how much oil Opec members should be pumping, el Badri said.
"We want to forecast exactly how much oil we should produce," he said. "30 million [barrels] is not like this bottle of water, you just open and pour it. A lot must happen to bring oil to the market. You have to spend a lot of money."
Opec member countries are investing US$312 billion over the next five years to bring 21 million barrels per day (bpd) to the market, he said. Opec's 12 members countries including the quota-exempt Iraq pump about 30 million bpd today.
Mr al Badri, who served as chairman of the Libya's National Oil Company during three runs from 1983 to 2006, said Libya could regain its pre-conflict pumping levels of 1.6 million barrels per day (bpd) within 15 months. Oil infrastructure appears largely undamaged but computers, panels and small technical instruments that are critical to production could have been looted or damaged, he feared.
"I am afraid of what happened in Iraq," said Mr al Badri. "In Iraq there was a lot of instrumentation lost. And those instruments you cannot really buy them from the shop."
ayee@thenational.ae