BP Chief Blames Inadequate Supply For Soaring Oil Prices

The chief executive of the energy giant BP said on Monday that soaring oil prices are a result of an inadequate supply rather than speculation.

"These prices are a signal that is telling us that supply is not responding adequately to rising demand," Tony Hayward told delegates at the 19th World Petroleum Congress (WPC) being held in Madrid.

He suggested politics rather than geology is the reason behind the supply shortage.

"The problems are above ground not below it," Hayward said.

"The problem is not a geopolitical one. It is a political one," he added.

Meanwhile, Hayward rebuffed the claim that speculation should be blamed for the price hike.

"This is not a speculative bubble," he said, warning of the end of cheap oil due to fundamental factors.

"The era of cheap energy is probably over, at least in the medium term," Hayward said.

The WPC meeting, which opened on Sunday night, is the biggest gathering of leaders from the world oil industry held every three years.

The meeting for this year is being held against the backdrop of the international oil price hovering above 140 U.S. dollars per barrel, sparking calls for something to be done to cool the market.