Next, is the conundrum that the newly merged oil companies, to date, are producing less, and investing less, than they did separately before the merger. This has contributed to increased market instability and occasional severe price reactions. And it could ultimately also jeopardise energy security, as many governments rely on the oil companies through their infrastructure to hold stocks for emergencies. The recent sharp and substantial rise in world crude oil prices is a major concern of the United Kingdom. Prices have reached a peak that cannot be sustained.
High prices pose a threat to global growth.
This is in the interests of neither producers nor consumers. As producers themselves acknowledge, high oil prices have already had damaging effects on the global economy, especially in developing countries who are more dependant on oil, and therefore, more vulnerable to oil price shocks. And, in Europe, high oil prices have triggered mass protests against high petrol prices. Over the past six months, there has been concentrated attention on the strategic importance of oil, the politics of global energy pricing and security of supply, which has been further heightened by tension in the Middle East. It is important that OPEC's commitments to continue to raise production quotas should oil prices stay high are fulfilled because, to help restore confidence in the oil market, we now need to see a period of lower, more stable prices.