Venezuela: OPEC Should Become a Political Actor against Imperialism
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 economic prosperity.
In particular, 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 added.
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.
Chavez 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 added.
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 of paper."
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.
Saudi Arabia 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 dollar.
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 and Venezuela 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.
Although the 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 Nozari, Iran's 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.
The US 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, Indonesia, Irán, Iraq, Kuwait, Libia, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela and Ecuador. Brazil has also expressed interest in joining after discovering important new reserves of oil.
