Media release
Australian Minister for Foreign Affairs, Alexander Downer
Friday, 25 August 2000
FA96a
International oil prices
I have today instructed Australia's Ambassadors to OPEC countries to convey at the highest level to their host governments Australia's concern about current high international oil prices and to urge them to substantially increase oil production to bring prices to a sustainable level. This would avoid disruptive price volatility, benefit both producers and consumers, and assist overall global economic activity.
Australian consumers are forced to pay the high international prices and I am determined to use our diplomatic network to ensure that Australian concerns are being heard.
Australia is concerned that oil output constraints, which have led to these high oil prices, are distorting energy markets and pose a serious threat to the global economy.
In addition to high gasoline prices, high international oil prices are placing strong upward pressure on broader prices, which may only become apparent some time later. The current situation has already contributed to higher global interest rates. If these pressures continue, they will seriously dampen the growth prospects for the world economy, including OPEC countries.
OPEC's decision at their meeting in March to increase oil output, for which Australia lobbied, does not appear to have been fully implemented and consequently prices have remained very high and even rose sharply in recent weeks. Oil supply is clearly not matching demand. Australia does not have any interest in artificially influencing prices but we are concerned that the current situation is not sustainable and poses a risk of a short-term oil price surge and more disruptive price volatility, which would be detrimental for everyone.
A number of regional economies have been experiencing pressure as a result of the high oil prices, and we will be discussing this issue with colleagues in the context of forthcoming APEC meetings.
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