Tensions in the Middle East, as well as speculation, are behind recent increases in oil prices, two Gulf oil ministers said on Tuesday.
“There is a lot of tension in oil-producing countries,” said the energy minister of the United Arab Emirates, Mohammad bin Dhaen al-Hamli, on the sidelines of the International Energy Forum in Kuwait.
“That I think is reflected in oil prices,” he told reporters.
Bahrain’s Abdul Hussein Mirza said crude prices were volatile due to geopolitical concerns and market speculation that should be tackled.
“The volatility is not due to supply or demand. It is due to speculation mainly, and the geopolitical situation,” he said.
He called for “some control on speculation” and an agreement over “measures that can be taken to reduce the speculation in the market,” he said.
Asked if he thought oil prices were too high at their current levels at around $106 for the West Texas Intermediate, Mirza, whose country has dwindling oil resources, said a $100 per barrel is the “fair” price for crude.
Oil ministers and delegates from the 88-member IEF are holding their biennial three-day gathering in the Gulf emirate of Kuwait to discuss the role of the forum in tackling market volatility.
Tensions have escalated in the Gulf due a standoff between and Iran and the West, which imposed sanctions on Tehran over its nuclear programme that the West fears could be leading to developing atomic weapons.
Iranian officials threatened to close the strategic Strait of Hormuz if sanctions imposed by the European Union affect its exports of oil.
On March 1, WTI crude hit $110.50 per barrel, the highest since May 2011, while Brent North Sea crude rocketed to $128.40 a barrel, the highest since July 2009.