KEY POINTS:
The International Energy Agency says world oil markets will remain tight until 2013, although some pressure could ease during the next two years because of increased supply.
In an interview to be published today the agency's executive director Nobuo Tanaka says that after 2010 supply will then drop
and demand increase, in particular in developing countries.
His warning came as Iran's Oil Minister said any military attack aimed at curbing Tehran's nuclear work would push crude prices to "unpredictable" highs.
"When oil prices change by US$10 [$13.40] to US$15 by official comments [about the market], oil prices will be pushed to unpredictable highs if some take an unwise decision to attack Iran," the website of the country's Oil Ministry quoted Oil Minister Gholamhossein Nozari as saying yesterday.
The Islamic Republic insists its nuclear programme is peaceful and aimed at generating electricity. But the West and Israel fear Iran is seeking to build atomic bombs. Israel is believed to be the only Middle East state with nuclear arms. Speculation about a possible attack on Iran because of its disputed nuclear ambitions has risen since a report this month said Israel had practised such a strike, prompting increasingly tough talk of retaliation, if pushed, from Tehran.
Iran's elite Revolutionary Guards warned last week Tehran would impose controls on shipping in the vital Gulf oil route if Iran was attacked. Nozari likened talks on attacking Iran to a "joke".
"Any military attack on Iran will have a strong and unimaginable response from the country," he said.
Crude prices fell at the weekend more than a dollar when Iran said it would respond to an incentives package offered by six world powers to try to resolve a long-running dispute over its nuclear development programme.
However Iranian Government spokesman Gholamhossein Elham said yesterday that Iran had no intention of halting its uranium enrichment work, as demanded by major powers, in order to start formal talks on the incentives offer. The IEA has said the world was in the grip of an oil price shock.
"We are clearly in the third oil price shock," said Tanaka.
The first oil crisis struck in 1973 when Arab states declared an oil embargo. The second began in 1979 following the Iranian Revolution.
But this crisis was different, Tanaka said. "Those price peaks forced consumers into saving oil" and oil companies to look for new wells, he said, but now "the biggest energy savings have been made [and] ... the easy oil outside [of] a few countries has been found."
In the interview to be published in the German economic daily Handelsblatt today, he says some countries such as Russia are taxing foreign companies heavily.
"This discourages investors," he said, adding that some state oil companies should dedicate a part of their revenue to social measures and investment in production.
On consumption, the IEA chief said he was against the lowering of taxation on petrol products because this would send the "wrong signal" in the battle against waste.
- AGENCIES