Brisbane, Australia: An overhaul of the global energy market could be a surprise outcome of the G20 summit with plans for a new agency to protect against oil and gas supplies being used as foreign policy tools, a report said on Saturday.

Energy security is a vital issue for many countries, and the long-term stability of oil markets is seen as crucial to ensure the reforms necessary to meet the G20’s aim of lifting its combined economic growth by at least two per cent over the next five years.

The Australian newspaper said that central to ensuring open markets was the creation of a new global institution, giving a greater voice to rising economies and addressing energy security fears.

It said this weekend’s Brisbane summit would not establish the new agency, but was aiming to agree the principles that it would adopt.

If approved, it would lay down principles of governance for all participants in energy markets and sit above both the Opec cartel and the International Energy Agency (IEA).

There was no immediate comment from the Australian government or other G20 delegations.

The emergence of energy as a central G20 platform comes with oil prices diving well below the $80-per-barrel (Dh294) mark, with global prices collapsing by some 30 per cent since June.

Russian President Vladimir Putin, who reportedly supports the idea of a new institution, admitted volatile energy prices were a major concern.

“We’re considering all the scenarios, including the so-called catastrophic fall of prices for energy resources, which is quite possible, and we admit it,” he said in an interview with the TASS agency ahead of the G20 when asked about global imbalances.

Putin said Russia, a key major oil and gas producer, was well-placed to deal with such issues but expressed concern about how emerging economies would cope.

“Our reserves are big enough and they allow us to be sure that we will meet our social commitments and keep all the budgetary processes and the entire economy within a certain framework,” he said.

“And what about those who don’t have these reserves?

“It will be hard for them in a situation like that, but I’d like to say once again that I expect us to have a joint discussion and seek a joint solution on how to change things for the better and eliminate these imbalances.”

The IEA this week forecast that prices would keep sliding well into 2015, held down by weak demand and increased shale production, amid “deep structural changes” transforming the industry.

Shale resources

China, after voraciously consuming energy for years, is now possibly entering a less oil-intensive stage of growth, while technological innovations have unlocked shale resources in North America.

In a report to the G20 industrial powers ahead of Brisbane, the International Monetary Fund said the “recent appreciable fall in oil prices, if sustained, will boost growth”.

But the lower prices are hurting some crude exporters, including Venezuela, Iran and G20 member Russia. The latter two are also struggling with the impact of Western sanctions.

The front-page splash in The Australian said although last-minute wrangling over the wording on energy in the G20 communique was still taking place, it was understood that Opec leader Saudi Arabia, as well as Putin, supported the agreement.

Putin, who is under intense pressure at the G20 over the Ukraine crisis, has previously used gas exports as a weapon to pressure neighbours.

More than half of the Russian gas shipped to Europe, where it accounts for 15 per cent of the total, passes through Ukraine.

The Australian said the G20 agreement was expected to include commitments on security of energy supply, which would preclude embargoes of any sort, and transparency of pricing.

Limits on the use of energy subsidies and commitments to energy efficiency were also likely to form part of the agreement, it said.