ROME -- The world has enough oil to fuel future economic growth, but the energy industry is facing a big challenge to ensure investment is enough to meet future demand, Saudi Arabia's Oil Minister Ali al-Naimi said on Tuesday.
The world's top oil exporter and holder of the largest oil reserves is working hard to ensure that the oil market is always well supplied, Naimi said in a speech to the International Energy Forum.
Limited fuel supply capacity, and not a lack of oil reserves, was the greatest threat to future energy supplies, Naimi said.
Fear that oil supplies have peaked or are close to peaking have contributed to the rally on oil prices to a record of over $118 a barrel on Tuesday.
"Recently, I have observed an unprecedented level of uncertainty, doubt and even fear in discussions about the future of energy and its impact on global economic prospects," Naimi said.
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"I can assure you unequivocally that the world is not running out of oil... Limited capacity along the entire supply chain is the real source of current global supply tightness and represents the greatest threat to ensuring adequate energy to fuel future economic growth.
"At its heart, this is not an energy resource issue; it is primarily an investment issue."
Shortages of labour, equipment and materials were raising costs and delaying new projects that would boost capacity, Naimi said.
Saudi Arabia has committed over $90 billion to increasing its energy capacity, Naimi said.
Naimi reiterated that the kingdom maintained spare output capacity of around 2 million barrels per day and that the kingdom would boost capacity to 12.5 million bpd by the end of 2009.
Current output stands at around 9 million barrels per day, a Saudi source said earlier this month.
Alternative fuels would make a limited contribution to energy supplies in the foreseeable future despite the billions of dollars that have been spent on developing them, Naimi said.
"Frankly, these efforts are sustained not by economic forces but because of high government subsidies," he said.
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