Reliance on imported oil poses ‘serious threat’ to APEC

The Asia-Pacific’s increasing dependence on imported oil poses a “serious threat” to the economic stability and energy security of the region, a report warned today.

The region is projected to import 44 per cent of its primary oil needs by 2035, up from 36 per cent in 2010, said the report carried out on behalf of the Asia Pacific Economic Cooperation (APEC) based in Singapore.

Oil production in the region has risen “only slightly” since 1990, outpaced by a significant increase in demand, said the study by the Tokyo-based Asia Pacific Energy Research Centre.

“This rising dependence on imported oil poses a serious threat to the economic stability and energy security of the APEC region,” it said.

Availability could be threatened by political events in West Asia and Africa, with production also depending on the ability of oil companies in these places to make adequate investments, it noted.

“As oil production becomes more concentrated in a few countries, oil prices will be increasingly influenced by the market power of the producing countries,” added the report.

“Increasing amounts of oil will need to be shipped over long distances, typically from the Middle East or Africa, which poses additional security risks.”

As a result, “continued oil price volatility will be a near certainty, there will be significant risks of supply disruption” which could “threaten the economic stability of APEC economies and the world,” the report said.

APEC groups 21 economies bordering the Pacific Rim, accounting for nearly half of world trade and more than half of global economic output.

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