Ali also suggested that the cartel might even restrict oil production for at least six months. After two recent output cuts, trimming OPEC quotas a third time would deplete world stocks, forcing prices higher. That's the highest it has been since February 1991, when United States-led forces liberated Kuwait from occupation by Saddam Hussein's Iraq. Increased energy efficiency means that those days are over. But Paul Ashby, oil analyst for ABN Amro in Sydney, warns that rising oil prices could depress global rates of growth.
Caution is particularly critical in Asia, where many economies depend heavily on imported oil.
A sharp rise in energy costs could endanger the region's fragile recovery from a prolonged economic slump. True, Indonesia, Asia's only OPEC member, stands to benefit from higher oil prices. But big manufacturing economies like Japan and South Korea could take body blows. Increased economic activity in Asia during the past six months has helped compensate for the steady rise in oil prices. But many analysts think things will get worse.