"The current price of oil is not a cost-reflected price. The only realistic price is if it is a result of supply and demand forces, and produced at what is called a cost-reflected price," Doucet said ahead of a news conference.

United Arab Emirates oil minister Obaid bin Saif al-Nasseri was quoted by a Dubai newspaper as saying the crude price - at $25 a barrel - was both a realistic and a reasonable one.

"He (Nasseri) is hoping that the price of oil will stay at $25 but I personally don't think it will. I do not think that the current price of oil is sustainable," he said.

Oil prices have nearly tripled since March last year when Opec decided to cut supplies in an effort to boost prices.

Benchmark Brent crude for March delivery was last trading at $26.32 per barrel on London's petroleum exchange on Thursday.

Doucet said in the long run, non-conventional oil sources outside Opec would get developed as they would become more profitable, leading to greater flow of non-Opec oil into the market.

He said: "From the long term prospects of oil, I don't think restricting supply is the best solution. I think there should be more focus by producing countries on the demand side...on getting increased markets for oil throughout the world."

He said the supply cut by Opec and steep rise in prices has not had "a major impact" on rich and industrialised countries as they have diversified the energy market, leaving oil usage only in the transport sector.

"But for a developing country like India, tripling of oil price is a very serious matter. It obviously affects them more seriously first of all, there are huge balance of payments problem. With oil price higher, reforms become more urgent (in these countries)," he added.

He said that if crude prices crossed $30, the US and European markets would face a "real problem."

Gulf Arab oil ministers, including Nasseri, are to gather in Saudi Arabia later this month to discuss strategy ahead of an Opec conference in March.