Oil price undermining economy says Qatar minister

Qatar?s Oil Minister, Abdulla Bin Hamad Al Attiyah. (Getty Images)

A senior oil official from Qatar has warned that the current low price for a barrel of oil is beginning to undermine oil producer’s economic stability and resulting in the delay or cancellation many development projects in the Middle East according to UAE-based newspaper Gulfnews.

Abdulla Bin Hamad Al Attiyah, Qatar’s Oil Minister was speaking at  the Asia Ministerial Energy Roundtable in Tokyo when he voiced his concerns about the long-term stability of energy supplies.

"For the first time in a quarter century, world demand for oil is falling; the price has collapsed since July 2008," he is reported as saying.

"Companies almost everywhere are freezing investment and re-evaluating energy projects based on high prices," he added.

Gulfnews also reported that data published by the world’s third largest oilfield services provider, Baker Hughes Inc, indicates that the number of fully operational oil and gas rigs worldwide has dropped by a massive 34% since September of last year. 

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The oil and gas market presents a "high-level risk" to investors in projects, Al Attiyah said, and governments must frame policies to help protect their investments.

"Low prices and the resulting drop in income of producing countries is creating problems for their economic stability and investment in additional capacities essential for the future," Al Attiyah is reported as saying.

"The illiquidity of global financial markets is also making it difficult for companies to invest, even in high-return projects."

Qatar officials have been doing the rounds at various energy conferences this weekend. The Emir of Qatar gave a speech praising his country’s LNG industry at gas conference in Bulgaria.