Leaders Differ on Politicizing OPEC

At the OPEC leader’s third private meeting in Riyadh, Venezuelan President Hugo Chavez wanted the oil exporter group to become an active political agent. Venezuela's oil minister Venezuela Rafael Ramirez and his Iranian counterpart Gholamhossein Nozari, wanted OPEC to formally express its concern about the weakness of the dollar. However, Saudis, the de facto head of OPEC, vetoed the proposal.

King Abdullah of Saudi Arabia said, "Oil is energy for building and prosperity, it shouldn't become a means of conflict. Those who want OPEC to become an organization of monopoly and exploitation ignore the truth."

The Vienna-based Organization of the Petroleum Exporting Countries (OPEC) is an international cartel made up of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. It is the provider of more than 40 percent of the world's oil.

The oil prices are high these days because of the weakness of the dollar. Any further drop in the dollar is likely to be accompanied by a rise in oil prices. Oil was trading closer to $90 a barrel late last week after topping $98 earlier.

Chavez clearly appeared to be a bitter antagonist of President Bush. He said, "If the United States attempts the madness of invading Iran or attacking Venezuela again, the price of oil is probably going to reach $200, not just $100. We are witnessing constant threats against Iran. I think OPEC should strengthen itself in this capacity and demand respect for the sovereignty of our nations, if the developed world wants a guaranteed supply of oil."

King Abdullah was however very clear in his thoughts and maintained that OPEC just had to ensure that the oil market is stable. He observed, "The current price of oil if we take into consideration inflation is less than what it was in the early 1980s. High taxes in consuming nations were hurting consumers more than the producers."

Saudi King Abdullah also pledged $300 million for environmental research on Saturday, but gave no further details. The draft final communique for the summit also made no mention of any such fund.