The 13th International Energy Forum (IEF) kicks off on Tuesday in Kuwait City, bringing to the table energy ministers from 88 countries around the world representing some 90 percent of global supply and demand.
With a controversial backdrop of higher oil prices, the IEF is hosting producers and consumers from the public and private sectors alike. Top economies such as China, India, the United States, Saudi Arabia and Russia will be there. A number of international organizations, notably the IEA and OPEC, will also be taking part.
Since the last meeting in Cancun in 2010, much has happened on the global arena, ranging from supply disruptions as a result of the Arab Spring revolutions to worries about weakening demand emanating from the euro zone debt crisis.
The events of the last two years have, from the perspective of the IEF, underscored the interconnected nature of the world we live in, and the pressing need to collaborate in tackling the energy challenges of the future.
Delegates will discuss the future energy mix, nurturing the necessary human capital, navigating a dynamic regulatory environment as well as advances in technology.
No less than $38 trillion of investments in the industry will be needed to satisfy increases in demand until 2035, according to the last assessment by the IEA. That translates into $1.5 trillion per year, almost 90 percent of it needed in exploration and production, known as upstream.
Rising political risks, particularly in the Middle East, coupled with varying forecasts on global economic growth and future demand scenarios, are obscuring the path forward. Improving cooperation between all stakeholders involved, along with National Oil Companies (NOC) and International Oil Companies (IOC), are also identified as critical to securing the necessary momentum.
Among other key issues on the agenda is oil market volatility and the obstacles it poses for industry investment and long-term planning. The Joint Organizations Data Initiative (JODI) was set up in an effort to provide more transparency to global markets by delivering monthly production and consumption numbers. In theory, that is supposed to help price discovery and mitigate the “negative impact” of volatility.
But the endeavor, which is already in its 11th year and depends on voluntary submissions by member states, has hit snags. As CNBC reported in the last JODI update, there were some notable absences including Iran, and for the third month in a row, the United Arab Emirates (UAE) and Libya.
The omission of a combined production of some 7.5 million barrels per day from just those three countries for the month of December provides an incomplete picture for policy makers, analysts and traders. However it’s not just a lack of submissions, but also poor quality data and delays.
“Unfortunately, it is necessary to note that the recent performance of some countries in JODI Oil is lagging behind and has considerable scope for improvement,” the latest IEF report ahead of the conference reads.
Delegates will also attempt to seek common ground between the various schools of thought pertaining of what drives oil prices. The conversation on the interplay between physical market fundamentals and financial market activity, such as speculation, has been going on for decades.
That, and whether energy regulators should intervene on “specific aspects of market behavior to promote price stability” as the IEF agenda states, is by historical measure unlikely to yield a clear consensus.
Yousef Gamal El-Din is CNBC's Middle East Correspondent and contributes to the channel’s flagship shows, as well as analysis for CNBC.com.
Stay in touch with him on Twitter at http://www.twitter.com/youseftv @youseftv