Offshore staff

STAVANGER, Norway -- While the price of oil has dropped off significantly from recent record levels, the prices is still too high, said Nobuo Tanaka, executive director of the International Energy Agency (IEA), to an audience at ONS on Wednesday, Aug. 27.

Tanaka expects market fundamentals to ease during the second half of this year into 2009, but the oil price is unlikely to retreat to levels from a couple years ago, he said. "The price will be linked to effective spare production capacity, and we expect this to remain low through 2013."

To mitigate capacity constraints, Tanaka recommends increasing energy supply, encouraging energy efficiency, and improving data transparency in all areas of the market.

In the long term, world energy demand is forecast to grow by 55% by 2013, according to Tanaka. Oil, natural gas, and coal are expected to account for over 85% of the growth during this period. As a result, many countries will increasingly become dependent on imports, he said.