Supply and demand concerns are driving the spike in oil prices as appetite for crude in developing nations is expected to soar over the coming years, the president of Chinese oil major CNOOC said Tuesday.
Fu Chengyu told delegates at the World Petroleum Congress in Madrid that while speculators, the weak dollar and geopolitical instability were playing a role, "the deciding force can be found in concerns over supply and demand, not just today but tomorrow as well."
Residents of developing nations consume an average of 2.5 barrels of oil each per year compared to 17 barrels per year by residents of nations belonging to the Organisation for Economic Cooperation and Development, which groups the world's richest countries, he said.
But if consumption in developing nations rises over the next 20 years to an average of five barrels per person per day, the world will need another 20 million barrels per day to meet the extra demand, he added.
"This is about 25 percent of today's production," the president of China's third largest oil producer by capacity told delegates at the gathering.
Last month China curbed its energy subsidies by hiking retail petrol and diesel prices as much as 18 percent and Fu said he did not think any nation could offer long-term fuel subsidies.
"I believe that in any country, subsidising oil prices is not a long-term strategy. Any oil price subsidies would not be supported economically," he said.
Western nations led by the United States argue that many emerging Asian economies are artificially propping up record high oil prices with subsidies by fuelling demand.
China is the world's second-biggest oil consumer after the US and industry experts say the country's voracious appetite for oil to fuel its record-breaking economic growth has been a crucial factor behind sky-high prices.
Elsewhere in Asia, Malaysia has hiked fuel prices by 41 percent and Indonesia by around 29 percent, while Taiwan and India have also raised their energy costs.
