World crisis could last three years - Oman economic chief

OPEC OPTIONS: GCC ministers discussed the impact of the global crisis on oil prices. (Getty Images)

Ministers from oil-rich Gulf states on Tuesday discussed the state of their economies in the face of the global crisis that has sent crude prices plunging.

Economy minister Abdel Nabi Mekki of Oman, which is hosting a Gulf Cooperation Council summit next month, said the world financial crisis, which has left Gulf stock markets reeling, could last up to three years.

"Nobody can predict actually. But I think it will take between two and three years," he said, adding: "Oil prices next year will be stabilised."

Gulf states have been hard hit by tumbling oil prices, which have dropped to just over $50 a barrel from a peak of $147 in July.

The Organisation of Petroleum Exporting Countries is due to meet in Cairo on Saturday amid speculation of another output cut.

OPEC kingpin Saudi Arabia - along with fellow GCC members the UAE, Kuwait and Qatar - account for more than half the cartel's official production.

Brent North Sea crude for delivery in January dropped 2.14 dollars to 51.78 dollars a barrel in London trade on Tuesday while light sweet crude fell 2.28 dollars to 52.22 dollars a barrel in New York.

Finance and foreign ministers from the six-member GCC, who are meeting to prepare for the December 29-30 summit, also focused on obstacles hindering the region's economic integration, a GCC official said.

Ministers were also reviewing steps taken towards the launch of a single GCC currency, scheduled tentatively for 2010.

"We hope the single currency will start operating at the set date, nevertheless 2010 seems to be approaching swiftly, it will represent a big challenge to accomplish the launch," Saudi finance minister Ibrahim Al Assaf said.

The six states - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - have been engaged in a process of economic integration since the establishment of the GCC in 1981.

Saudi economist Ihsan Bou Haliga said he thought the "current financial crisis is something that should encourage the GCC countries to carry out their economic integration and to diversify their economies."

Adoption of the single currency by 2010 would be an important step in confirming the GCC countries as an economic bloc, he added.

Gulf foreign ministers are also due to hold talks on regional developments, including situation in the the Palestinian territories, Iraq, Sudan and Somalia.

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