Fossil Fuels

Malaysia and Indonesia appear headed towards a territorial dispute, with their national oil companies laying claim to potentially rich offshore oil-and-gas blocks off Borneo island.
Malaysia has said it was ready to contest any overlapping claim to the area. Petronas, Malaysia’s national oil company, said that it “was in advance stages of awarding the ultra-deepwater blocks… which are within the Malaysian territorial boundary”.

With crude at US$50 a barrel and producers operating near maximum output, fears are widespread that the world is on the cusp of a major oil shock.

$50 or $60 a barrel oil is still affordable by western standards, but surely debilitating for growing economies What if it hits $80, or even $100 by estimates of pessimists?

China’s need for oil has led it to West Africa’s oil fields in the Gulf of Guinea, and to Central Africa, where oil production in several countries is also coming on line.

In the face of record high oil prices, Germany and Britain are expected at the G7 meeting on Friday in Washington to propose measures to make world oil markets more transparent.

The world’s oil refiners are unimpressed by Saudi Arabia’s boost to production capacity that would only swell supplies of sour, high-sulfur crude while they hanker for sweet oil.

OPEC producers insist there is no shortage of oil despite record prices and although plenty of heavy crude is available, refineries are thirsty for light sweet crude which is in shorter supply, analysts say.