Asian nations consider stockpiling oil

Asian officials concerned that they pay too much for oil from the volatile Middle East met today to seek ways to cushion the blow of price shocks, and were expected to endorse more stockpiling of petroleum to stabilise their fuel supply.

Oil prices that recently peaked at €32 per barrel on the New York futures market are bad news for consuming nations, and energy ministers from around Southeast Asia and across the Pacific Rim are meeting today and tomorrow to ponder long-term solutions.

Prices have dipped by several pounds a barrel since OPEC said last week it would pump more, although it remains unclear how much extra crude might actually go onto the market. Crude oil futures for July delivery plunged by 3.6% on Tuesday in New York, settling at €29 per barrel – the lowest since April but still an uncomfortably high level for many consumers.

Asian energy leaders say one solution to the region’s dependence on imports could be more stockpiles and the use of alternative energy sources, such as natural gas.

Unstable energy supplies and swinging prices could stop developing Asian nations from hanging onto recent economic gains and could “threaten nations as a whole as consumers become restless,” Philippine Energy Secretary Vincent Perez said this morning as ministers from the 10-nation Association of Southeast Asian Nations (ASEAN) opened a meeting.

The ASEAN nations were to discuss the problem with partners from top Asian economies: China, Japan and South Korea.

Energy officials planned to endorse the idea of more stockpiling, with Japan and South Korea providing technical assistance to their neighbours.