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| Oil king: Saudi Arabia's King Abdullah attended the opening ceremony for the OPEC Summit in Riyadh Saturday. His country is
the world's top oil producer, generating 30 percent of OPEC production. Ali Jarekji/Reuters |
OPEC's lost sway over oil prices
This weekend's summit focused mostly on poor nations, climate change, and the euro vs. the dollar.
from the November 19, 2007 edition
Page 2 of 3
US Energy Secretary Samuel Bodman said earlier this week that he did ask OPEC members to increase supply, though he said that the request seemed to have fallen on deaf ears.
Anyone hoping that the OPEC Summit – the first meeting of the leaders of its member states since 2000 – would bring relief from gas prices that have jumped 25 percent this year to above $3 a gallon in the US, is going to be disappointed.
On Friday, crude oil traded in the US rose $1 to over $95 a barrel after Venezuela's Oil Minister Rafael Ramírez said, "OPEC can't do anything about the price ... there is enough oil in the market."
Venezuela – whose leftist President Hugo Chávez appears to revel in tweaking the nose of the US, which he alleges backed a failed coup against him five years ago – has been pushing for higher oil prices in tandem with Iran, as well as a move away from the US dollar.
In this, both countries failed. Saudi Arabia – which accounts for about 30 percent of OPEC production – clearly signaling its opposition to what it views as the politicization of the commodity.
After Mr. Chávez urged OPEC's leaders to use their oil wealth to become an "active political agent" and warned that oil prices would rise above $200 a barrel if the US takes military action against his ally, Iran, Saudi King Abdullah dismissed his arguments.
"Oil ... should not become a tool for conflict and emotions," he said. "Those who want OPEC to become an organization of monopoly and exploitation ignore the truth."
The joint OPEC statement released at the end of the summit said that the "stability of the oil market is essential," which oil analysts said was a repudiation of Venezuela's and Iran's aims.
Chávez also called on oil producers to sell to poor countries at prices at about one-fifth of the current market price, an idea that gained no traction and appeared designed to bolster his populist credentials. The only support for this idea came from Ecuador's leftist president, Rafael Correa. Even Iranian President Mahmoud Ahmadinejad, who Chávez was scheduled to meet later Sunday in Tehran, failed to back to him on this suggestion.
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