World oil markets to remain tight until 2013: IEA chief

BERLIN, July 5, 2008 (AFP) – International Energy Agency chief Nobuo Tanaka has predicted that world oil markets will remain tight until 2013, according to an interview with the German economic daily Handelsblatt. The market will initially relax from now until 2009/2010 due to a foreseeable increase in supply brought about by new production sites, said Tanaka who is the IAE’s executive director.

But the supply will then drop and demand increase, in particular in developing countries, he added in the interview due to be published on Monday.

Tanaka observed that some countries such as Russia were taxing foreign companies heavily.

“This discourages investors,” he said, adding that some state oil companies should dedicate a part of their revenue to social measures and investment in production.

On consumption, the IEA chief said he was against the lowering of taxation on petrol products because this would send the “wrong signal” on the subject of the battle against waste.

The price of oil is currently at a historic high at close to 150 dollars a barrel, an increase of more than 100 percent in the past year.