Korea has called for Middle East producers to eliminate the ''Asian premium," a practice that sells crude oil and gas to three Northeast Asian countries at higher prices than to North American and European nations.
"As competition intensifies in the Asian oil and gas markets because of shale gas boom in North America, getting rid of the ‘Asian premium' will be a win-win formula to both producers and consumer," Chung Yang-ho, an assistant minister at the Ministry of Industry, Trade and Resource, said on Monday.
Chung was among officials representing 18 energy exporters and importers at the sixth Conference of Asian Energy Ministers in Doha, Qatar.
Middle Eastern oil producers are setting the prices of crude oil exported to Korea, China and Japan at 2 percent higher than shipments to North America and Europe.
In the case of gas exports, the price gap between Northeast Asia and the U.S. and Europe is up to 30 percent.
This is because when the prices of Middle East products go up, North America and Europe, as well as having oil and gas fields, can look to Africa and Latin America, industry sources say.
However, Northeast Asian importers have no such alternatives, which makes them easy victims of the Middle Eastern producers. This changed with the ''shale revolution," which pulled down global oil and gas prices sharply last year.
Barring unexpected events, the low prices are likely to continue through next year, making it difficult for Middle East countries to continue their take-it-or-leave-it approach to Northeast Asian importers, industry sources note.