The International Energy Agency (IEA) has initiated discussions with seven emerging economies namely China, India, Russia, Brazil, South Africa, Mexico and Indonesia to form an association that would lead to data sharing and more co-ordination over the release of emergency crude oil stocks held by member countries.
Maria van der Hoeven, executive director of IEA, told the Financial Times: “The geographical map of energy consumption has been redrawn. The centre of gravity has moved to the east - we cannot close our eyes.”
Cautioning that the discussions are at a very preliminary stage and could more time to reach any deal, van der Hoeven said: “There is a genuine interest from the IEA, [current] member countries and the potential associated countries to do something together. We have a mutual interest: security of energy supply.”
The new association would not be forced to hold the equivalent of 90 days of crude oil imports that the industrialised countries maintain as emergency reserves, reported FT.
Of the IEA’s existing members, the US and Canada are major oil producers, the UK and Norway are major oil and gas producers. Russia is a major producer of natural gas, while China and Brazil are major producers of thermal coal and biofuels respectively.
“Until now we have been talking about partnership, which is bilateral, van der Hoeven explained. “With association [the discussion] is multilateral”.
Oil industry experts have been warning that the IEA needs to engage with emerging countries or risk falling into irrelevance.
IEA forecasts that emerging countries would for the first time consume more oil than industrialised nations in the second quarter of 2013. It estimates that non-OECD countries will consume 44.9m barrels a day (b/d) this quarter, compared to 44.7m b/d for the OECD nations.
The seven countries will be invited to attend the next IEA ministerial meeting that is scheduled in November 2013.