Qatar's oil minister, Abdullah al-Attiyah said on Monday that oil prices are no more influenced by the market's supply and demand than the political tensions.
The comments, which were made at the 8th Arab Energy Conference in Amman, Jordan, follow the International Energy Agencyâ€™s (IEA) announcement on Friday that it cut its growth estimate for world demand of oil during 2006 by 15 percent.
Oil prices are coming under political pressures more than supply and demand, said al-Attiyah, according to Sky News.
The conference, which began on Sunday involves key Arab energy ministers from other oil-producing Arab countries to discuss the effect of rising oil prices and ways to develop alternative energy sources. Sixty percent of the world's known oil reserves are located in Arab countries, which account for one third of global production.
Saudi Arabiaâ€™s oil minister, Ali al-Naimi, warned other representatives about a looming economic problem because of the increased policies of economic protectionism, or what is known as economic nationalism, according to the Associated Press.
He added that the expectations of Arab oil producers should not be taken as indisputable, â€œâ€¦especially the continuation of big demand for oil and its prices remaining at the same level or increasing.
He cited the 80 percent decline in oil prices during the 1980's when industrialized nations turned to alternative energy sources away from oil.
Although crude-oil futures fell on Friday after the IEA cut its growth estimate for world demand by 220,000 barrels a day off its growth forecast for the year to 1.25 million barrels a day, thus putting average daily demand at 84.84 million barrels.
Mr. Attiyah argued that geopolitical factors are in play over Iran's nuclear ambitions and shortfalls due to the Nigerian refinery unrest. He said over 1.5 million barrels of extra supplies in the market were not helping to stabilize oil prices due to the political factors.
As such, he said evidence of rising oil supplies and forecasts of weakening global oil demand is being outweighed by fear among the traders and is yet a long way from stabilizing any sooner.