Arab Turmoil to 'Affect Energy Markets for Years'


"Events like the Arab revolutions, Japan's earthquake and tsunami, and other rare, so-called 'black swan' events seem to be on the rise."

Algeria's former energy minister warned Wednesday the ongoing political and social turmoil in the Arab world will have "dramatic" implications for energy markets in coming years.

While the outcome of the Arab revolutions is "by no means certain," it is already evident that "important changes are in progress that are likely to impact energy markets in the long term," Nordine Ait-Laoussine said.

Events like the Arab revolutions, Japan's earthquake and tsunami, and other rare, so-called "black swan" events seem to be on the rise, said Mark Williams, downstream director at Dutch oil giant Royal Dutch Shell Plc (NYSE:RDS.A; NYSE:RDS.B).

"The scientist in me says they aren't, but it sure seems like they are," Williams said.

Iraq Deputy Prime Minister Hussain al-Shahristani highlighted the uncertainty that these events have raised for world oil markets.

"We don't know yet about the long term consequences of the instability in the Middle East, about the catastrophe in Japan, about the explosion in the Gulf of Mexico. That can affect future projections for oil demand," al-Shahristani said.

Finding ways to minimize disruption from rising and volatile oil prices is a priority for France's leadership of this year's G-20 group of industrialized nations, industry minister Eric Besson said.

"The answers to the quick increase of oil prices will be collective," Besson said. "Consumers countries, producers countries and oil companies must work together."

Price volatility "makes the signals more difficult for consumers and investors to read," Shell's Williams said. He said improved market transparency and an improved balance between supply and demand, partly achievable through greater investment in new energy sources such as biomass, will help stabilize the price trend.

Total Chief Executive Christophe de Margerie took a reassuring tone, saying "for now there is nothing to be worried about, even if the price is high."

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