OSAKA, Japan — Finance ministers from the Group of Eight industrialized nations urged oil producers Saturday to boost output to help stabilize record-high oil and food prices, calling the situation a serious threat to global economic growth.
The world economy faces “headwinds” because of the rise in prices, the G8 ministers said in a joint statement at the conclusion of two days of talks in Osaka, in western Japan.
“Elevated commodity prices, especially of oil and food, pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and may increase global inflationary pressure,” the statement said.
The fundamental factor driving oil prices is the imbalance between rising global demand and supply constraints, the ministers said. They added that geopolitical and financial factors also play a role — a reflection of some ministers’ view that speculative trading in oil markets is pushing up prices.
U.S. Treasury Secretary Henry Paulson insisted that the problem stems primarily from tight supplies and warned against embracing “short-term solutions.”
Noting that oil prices have jumped fivefold since 2002, Paulson in a statement called on countries to let markets work and reduce reliance on subsidies. He pressed oil-producing countries to allow more investment in oil exploration and production.
“I think there’s a danger if people say, ‘Oh, it’s the speculators,’ ” Paulson told reporters after meeting with his G8 counterparts. “We don’t want to misdiagnose the problem. And if you look at the problem, I think it’s pretty clear. We have not had an increase in production capacity in oil for the last 10 years.”
The current president of the Organization of Petroleum Exporting Countries, Chakib Khelil, has said that the cartel will make no new decision on production levels until its Sept. 9 meeting in Vienna.
Other G8 members, particularly France, Germany and Italy, place greater blame on speculators.
Italian Finance Minister Giulio Tremonti said “enormous” speculation is behind the rising energy prices. He has proposed an increase in margins needed to trade oil futures contracts.
The agenda for the G8 talks also included troubled financial markets, private-sector-led development in Africa and global warming.
