Negotiating Oil Prices Amidst Oils’ Crippling Effects: An ASEAN Strategy

Antonio A. VerPresident & Founder, Asia Pacific Basin for Energy Strategies (APBest)


A 600% spike in crude oil prices since 1999 has triggered a grim chain of economic turmoil, food shortages, and worsening social unrest in many parts of the world. Multiple factors may have propelled the pernicious rise in fossil fuel prices. However, one thing is self-evident: every oil-consuming country has a vital stake in finding a sound, long-term and socially responsible solution to the unchecked prices of oil, its derivatives, as well as products that depend on oil for their manufacture and distribution.

In a growing region such as the ASEAN, the stakes are just as high as in G8 nations and in the explosive-growth economies of China and India. But the stakes for ASEAN can also be the pistons that would drive creative strategies in response to oil price hikes, and provide a collective action model that may frame a global energy plan. After all, “ASEAN controls 40% of the entire oil and gas resources in the Asia Pacific rim.” (Weerawat Chantanakome, PhD, former Executive Director of the ASEAN Centre for Energy).

Through strong advocacy by the ASEAN as a collective negotiating body, this paper urges the United Nations to: (a) immediately convene a technical working group or a UN-sanctioned entity that will implement effective measures in negotiating socially acceptable pricing and supply policies with oil producing countries and cartels; (b) empower this working group or body to confer with the Organization of Petroleum Exporting Countries, the Council of Gulf Oil States, trading and financial institutions involved in oil futures, as well as the governments in the Asia-Pacific Region towards agreement on a global pricing model that is at once compassionate, rationally profitable, and morally responsible.

Outcomes anticipated from this ASEAN-driven strategy: (a) by the fourth quarter of 2008, a global forum within the UN is created based on the ASEAN model of collective negotiating power; (b) by the second quarter of 2009, this UN forum has proposed concrete steps to harness sources of renewable energy and to revamp one-sided pricing policies; (c) by the third quarter of 2009, OPEC and other industry associations have reviewed those proposed steps; (d) by the fourth quarter of 2009, the ASEAN model is widely accepted as the catalyst of cooperation among governments, international institutions, non-governmental organizations, oil industry associations and consumer groups working towards a global consensus on an enlightened energy policy.

While the infrastructure for energy security is being built, and it will take many years to build it let alone raise the required huge investment, let’s negotiate!

* Antonio A. Ver is also the Convenor of Asia Pacific Basin for Energy Strategies