India, China, Brazil driving global oil demand: Obama
12 Mar 2011
Increased use of energy resources by fast growing economies like India, China and Brazil is driving the global oil and gas demand, US President Barack Obama said on Friday.
"The problem is a great deal of uncertainty in the oil markets, part of it prompted by the fact that the economy's growing faster in some places than others, but you've got China and India and Brazil and other emerging nations that are using more and more energy as their economies advance," Obama said at a news conference when asked about the rising gas prices in the US.
Following the current unrest in the Middle East, gas prices in the US have crossed $3.5 a gallon and is expected to go up further, which is prompting demand of use of strategic oil reserve. Obama, however, said that was an option not under consideration right now because there was no major disruption in oil supplies.
"We already saw that trend in 2008. Because of the worldwide recession oil prices went back down, but to some degree a lot of what's happening in prices is as a consequence of economic growth, and countries and economies starting to use more oil," he said, adding, "Part of it, though, is also uncertainty in terms of what's happening in the Middle East."
"One of the messages that I want to send today is that we are confident about our ability to fill any potential gaps in supply. Libya, for example, does not account for a large portion of overall world production…. They provide a type of oil that is highly valued and there's a high premium on it, but basically even if Libyan oil production was suspended for a significant period of time because of the unrest there, we'd be able to fill that gap. So a lot of this has to do with uncertainty in the market," he said.
Obama said the idea behind the 'strategic petroleum reserve' is if there was a severe disruption in supply, similar to what happened in the '70s, for example, when OPEC making a decision not to sell for a while, how would the US economy continue to function, and making sure that Americans have sufficient supplies for that.
