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Saudi king says oil price too high

King Abdullah's comments came ahead of his four-day trip to New Delhi starting on January 24, the first by a Saudi monarch in 50 years.

india Updated: Jan 23, 2006 13:07 IST
Reuters
Reuters
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Saudi Arabia's King Abdullah said current global oil prices were too high and needed to be at a more moderate level, television channel NDTV 24X7 reported on Sunday.

"We want to strengthen the link between India and Saudi Arabia with regards to energy, and the ability to provide energy to India over a long term. From our perspective I personally feel that the current price of oil is too high," King Abdullah said in an interview with the channel, which was recorded in Riyadh.

"The price is damaging to developing countries who subsequently have to suffer. The price needs to be at a more moderate level."

King Abdullah's comments came ahead of his four-day trip to New Delhi starting on January 24, the first by a Saudi monarch in 50 years.

Oil prices surged to $69 per barrel on Friday, the highest level since September as tensions mounted over OPEC-member Iran's nuclear ambitions.

The Organization of the Petroleum Exporting Countries on Friday forecast world oil demand would grow nearly 2 per cent in 2006 to 84.8 million barrels per day.

The producer group, which meets at the end of the month to review its output policy, is considered unlikely to cut production, although hawkish Iran said on Friday that the market was oversupplied.

India maintains that developed nations are not doing enough to restrain oil-producing countries from pushing up prices but King Abdullah's comments are likely to bring some relief.

Ties between Saudi Arabia, Islam's birthplace, and India, Asia's third-largest economy and home to a large Muslim minority, have improved incrementally since the early 1990s.

The Saudis are looking to deepen economic ties with Asian giants China and India, whose energy needs are soaring as their economies maintain red-hot growth.

Saudi Arabia accounts for almost one-quarter of India's total imports of crude oil of 1.9 million barrels per day. In 2004, New Delhi bought crude worth $6.2 billion from the Saudis.

Riyadh, eager to hold on to its share of India's rising oil imports as the Indian economy grows at an expected rate of 6 to 7 per cent in the next decade, has said it would continue to be a reliable supplier.

First Published: Jan 23, 2006 13:04 IST