Caracas, November 19, 2007 (venezuelanalysis.com) - The
Organization of Petroleum Exporting Countries (OPEC) should reclaim its "anti
colonial roots" and "convert itself into a geopolitical actor" in the fight against imperialism and
exploitation, Venezuelan President Hugo Chavez argued at the 3rd
OPEC summit in Riyadh, Saudi
Arabia, over the weekend. Opposing him was key US ally, Saudi King Abdullah, who
argued the organization's goal was simply to ensure market stability and
Chavez demanded that OPEC take a stand against US threats to member nations.
"If the United States is
crazy enough to invade Iran,
oil prices will shoot up not to US$100 but $200 per barrel," he warned.
"The basic reason for
all this aggression is oil. We have seen it in the situation in Iraq and the threats against Iran," he
However, Saudi Foreign Minister Prince Saud al-Faisal said
OPEC wouldn't take a stand on a possible U.S.
invasion of Iran.
"These are issues that can be raised in other forums, not in OPEC," he said.
also argued that OPEC should lead the way in promoting a humanist, solidarity-based
global economy. While he said $100 a barrel is a "just price" for
developed countries, he proposed that OPEC countries establish an OPEC bank and
sell crude oil to poor countries at a discounted price. OPEC "must stand up and act as a vanguard against poverty in the world" he
OPEC, which produces 40% of the world's oil, has only held
two full summits before, once in 1975 in Algiers and then in 2000 in Caracas.
In 1973 Arab members suspended oil exports to countries that
supported Israel in the Middle East war sending oil prices skyrocketing and
producing long lines at gas stations in the US and Europe and contributing to
inflation. Since then former US president
Ronald Reagan sought to bring OPEC "to its knees . . . and almost
succeeded," Chavez said.
However, the Caracas Summit in 2000 was the "rebirth of
OPEC," Chavez said, "We received the presidency with oil at around $10 a barrel
and we are handing it over with oil at nearly $100."
The falling US dollar was also at the center of controversy
at the summit, between Iran,
backed by Venezuela, and
recently rejoined leftist member Ecuador
on one side and US ally Saudi Arabia on
the other. Iranian President Mahmoud
Ahmadinejad told reporters on Sunday that despite opposition from Saudi Arabia
OPEC member nations showed interest in changing hard currency reserves into a
currency other than the U.S. dollar, which he described as a "worthless piece
Oil is traded in US dollars on the world market and the
declining dollar, which is at a 26
year low against the sterling and an all-time low against the euro, has sparked
concerns among OPEC nations, which are heavily reliant on their oil industries,
as it has eroded the value of their dollar reserves.
opposed a move by Iran
on Friday to include concerns over the dollar in the summit's closing
statement. An unauthorized 30-minute broadcast of a closed-door session
revealed officials debating the issue. However, Saudi delegates refused to
agree with the measure, saying the proposal could lead to a "collapse" in the
Even talking publicly about the currency's decline could
result in further depreciation Saudi
Arabia's foreign minister warned.
"There was a proposal from Iran
to have a basket of currencies for the pricing of OPEC oil, but a consensus could
not be reached," said Bayan Jabor, Iraqi finance minister.
closing declaration did not specifically mention concerns over the dollar, Iran and Venezuela,
with the backing of Ecuador,
were able to secure an agreement that OPEC finance ministers would discuss the
issue before the next scheduled oil ministers meeting in Abu Dhabi, United Arab
Emirates, on December 5.
"We have agreed
to set up a committee consisting of oil and finance ministers from OPEC
countries to study the impact of the dollar on oil prices," Gholam Hussein
oil minister, confirmed.
The euro is a
much better option than the dollar Chavez told reporters on Sunday. The US
dollar is in "freefall without a parachute" he added.
prints dollar bills with no real economic foundation, Chavez continued, saying
the fall of the dollar signifies, "the fall of imperialism."
"The day will arrive not only in OPEC, but also in Latin America, when we will be liberated from the
dollar," he declared.
A decision on
output levels was also postponed until the meeting in Abu Dhabi. However OPEC officials questioned
whether increased output would have any effect on oil prices, saying the recent
hike has been driven by dollar depreciation and financial speculation by
investment funds, rather than a supply shortage.
King Abdullah tried to divert the focus away from the dollar
debate, announcing that Saudi
Arabia would provide US$300 million toward
an "independent" body "free from political pressures" to research the impact of
the oil industry on the environment. However, he then claimed "It has been
said that oil has an impact on climate. This is false. Such arguments tend to
mix facts with fantasies."
OPEC member countries
include Algeria, Angola,
Iraq, Kuwait, Libia, Nigeria, Qatar,
Saudi Arabia, United Arab Emirates, Venezuela
has also expressed interest in joining after discovering important new reserves