2008’s crude oil exports: setting new record price
07:25' 17/01/2008 (GMT+7)
VietNamNet Bridge - In spite of being an oil exporter, Vietnam will face challenges from this year on as the country has seen a sharp reduction in the amount of crude oil for export and expects growing import demand in the upcoming years to supply materials for oil refineries. According to economic expert’s forecasts, 2008 will witness oil price surging to a new price level, representing a record high over the same period of previous years.
Two major factors controlling the market are the law of supply and demand and political instability in key oil exporting countries.
Crude oil remained record high
Oil demand skyrocketed in 2007 while supply could not keep pace. This is the main reason pushing the oil price up. According to economic experts, in developed industrial countries such the US, Japan, and Western Europe, although economic growth slowed down, demand still increased.
However, reviewing the sources, OPEC currently accounts for one third of total oil worldwide. Thus, OPEC by itself cannot effectively stabilize the market in a critical situation.
Other factors influencing energy prices were the West's standoff with Iran over its nuclear program, attacks by Nigerian rebels on that oil-rich nation's crude infrastructure and Turkish attacks on Kurdish rebels in northern Iraq, which sparked concerns that the rebels would retaliate by attacking an oil pipeline.
Vietnam reduced export amount
Mr. Nguyen Xuan Thang, General Director of Petechim Oil and Gas Commercial Company said that in spite of being the third largest oil exporter in Asia, after Malaysia and Indonesia, in 2007, the amount of exploited oil decreased about 1.5 percent, with crude oil export posting about 15.3 million tons. Nevertheless, due to a surge in oil price, the total export value still reached 8.59 billion USD, an increase of 21 percent over the target.
Assessing the output reduction, one expert in the oil and gas sector, pointed to some domestic oil fields reduced output as the cause is missing the target of tapping 1 million ton crude oil.
PetroVietnam set a target to exploit 16 million tons of oil this year, export 15.65 million tons of crude oil and condensate, with an export turnover of 7.6 billion USD. With the current oil price, many experts forecast that this year’s export turnover will remain at record highs or exceeding that of 2007 (8.78 billion USD).
Mr. Thang said that Vietnam will become an oil importer in the near future when the Dung Quat oil refinery comes into operation and PetroVietnam directes Petechim to raise the share of import crude oil to replace domestically exploited oil.