Divided OPEC meets for rare summit
OPEC heads of state met in Riyadh on Saturday for a rare summit, with the organisation divided over the falling US dollar and attempts to give a political impetus to the oil-exporting cartel.
By Agencies |
RIYADH: OPEC heads of state met in Riyadh on Saturday for a rare summit, with the organisation divided over the falling US dollar and attempts to give a political impetus to the oil-exporting cartel.
Iranian President Mahmoud Ahmadinejad arrived in the Saudi capital to join fellow leaders from OPEC oil-exporting countries for only the third gathering of heads of state in the organisation's 47-year history.
The event comes at a time of tension on world oil markets, with the cartel under pressure to increase its output to help calm record crude prices that had threatened to breach $100 a barrel 10 days ago.
The talks are intended to map out the strategic direction of the Organisation of Petroleum Exporting Countries, but the 12 members of the cartel, which includes an anti-US bloc of Iran and Venezuela, are divided on a number of issues.
In a gaffe late Friday, a private meeting of OPEC oil, foreign and finance ministers was mistakenly broadcast to journalists, revealing a spat between OPEC kingpin Saudi Arabia and Iran about the waning US currency.
Venezuelan President Hugo Chavez is also expected to push his idea to make OPEC a more political organisation in plans sure to run into opposition from the Saudi kingdom, a key US ally in the Middle East.
Another leftist South American country, Ecuador, is set to seal its return to OPEC at the summit after leaving the cartel in 1992.
The blunder on Friday was an embarrassment for OPEC and provided a rare glimpse of the inner workings of the organisation, whose members provide about 40 per cent of world oil.
Journalists witnessed Iran and Saudi Arabia spar over the issue of the falling dollar courtesy of a television in the media room that mistakenly had a live feed of the meeting.
The eavesdropping ended when a furious official emerged to switch off the broadcast.
Iran, backed by Venezuela, requested that a final declaration to be issued by OPEC leaders at the end of the summit on Sunday express the concern of member states about the falling dollar and its impact on oil revenues.
Reacting to the proposal, Saudi Foreign Minister Prince Saud al-Faisal warned against mentioning the US currency.
"There are media people outside waiting to catch this point and they will add to it (exaggerate) and we may find that the dollar collapses," Prince Saud said.
Saudi Arabia appeared to have prevailed in the debate about the dollar and OPEC's secretary general has said the issue will not be mentioned in the final communique.
The fall of the dollar, which has declined by about 15 per cent in 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency.
"Managing OPEC politics growing forward is going to be increasingly difficult so long as antagonism between Iran and Venezuela and the US continues," said an analyst from US-based oil brokerage SIG, Yasser Elguindi.
"You have the anti-US crowd and the neutral crowd." OPEC producers have a history of using their oil exports as a political weapon - they ceased exports in 1973 in protest at Israel's invasion of Syria - but nowadays kingpin Saudi Arabia likes to stress the purely economic agenda of the group.
The presence of Ahmadinejad is also a delicate issue for the host country, whose leaders were reportedly infuriated when the fiery Iranian used an Islamic Conference in the Saudi city of Mecca in 2005 to deliver his Holocaust denial.
Despite pressure from consumer countries to increase supplies to help cool near three-figure oil prices, OPEC ministers have ruled out taking a decision, at least until a regular meeting in Abu Dhabi on December 5.
New York's benchmark oil price rose back above $95 on Friday to close at $95.10 per barrel while London's Brent North Sea crude climbed $1.39 to settle at $91.62 per barrel.
Security is extremely tight, with the streets of the centre of the city closed and residents enjoying an extra two days of leisure time after local authorites declared Saturday and Sunday public holidays.
Iranian President Mahmoud Ahmadinejad arrived in the Saudi capital to join fellow leaders from OPEC oil-exporting countries for only the third gathering of heads of state in the organisation's 47-year history.
The event comes at a time of tension on world oil markets, with the cartel under pressure to increase its output to help calm record crude prices that had threatened to breach $100 a barrel 10 days ago.
The talks are intended to map out the strategic direction of the Organisation of Petroleum Exporting Countries, but the 12 members of the cartel, which includes an anti-US bloc of Iran and Venezuela, are divided on a number of issues.
In a gaffe late Friday, a private meeting of OPEC oil, foreign and finance ministers was mistakenly broadcast to journalists, revealing a spat between OPEC kingpin Saudi Arabia and Iran about the waning US currency.
Venezuelan President Hugo Chavez is also expected to push his idea to make OPEC a more political organisation in plans sure to run into opposition from the Saudi kingdom, a key US ally in the Middle East.
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Another leftist South American country, Ecuador, is set to seal its return to OPEC at the summit after leaving the cartel in 1992.
The blunder on Friday was an embarrassment for OPEC and provided a rare glimpse of the inner workings of the organisation, whose members provide about 40 per cent of world oil.
Journalists witnessed Iran and Saudi Arabia spar over the issue of the falling dollar courtesy of a television in the media room that mistakenly had a live feed of the meeting.
The eavesdropping ended when a furious official emerged to switch off the broadcast.
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Iran, backed by Venezuela, requested that a final declaration to be issued by OPEC leaders at the end of the summit on Sunday express the concern of member states about the falling dollar and its impact on oil revenues.
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Reacting to the proposal, Saudi Foreign Minister Prince Saud al-Faisal warned against mentioning the US currency.
"There are media people outside waiting to catch this point and they will add to it (exaggerate) and we may find that the dollar collapses," Prince Saud said.
Saudi Arabia appeared to have prevailed in the debate about the dollar and OPEC's secretary general has said the issue will not be mentioned in the final communique.
The fall of the dollar, which has declined by about 15 per cent in 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency.
"Managing OPEC politics growing forward is going to be increasingly difficult so long as antagonism between Iran and Venezuela and the US continues," said an analyst from US-based oil brokerage SIG, Yasser Elguindi.
"You have the anti-US crowd and the neutral crowd." OPEC producers have a history of using their oil exports as a political weapon - they ceased exports in 1973 in protest at Israel's invasion of Syria - but nowadays kingpin Saudi Arabia likes to stress the purely economic agenda of the group.
The presence of Ahmadinejad is also a delicate issue for the host country, whose leaders were reportedly infuriated when the fiery Iranian used an Islamic Conference in the Saudi city of Mecca in 2005 to deliver his Holocaust denial.
Despite pressure from consumer countries to increase supplies to help cool near three-figure oil prices, OPEC ministers have ruled out taking a decision, at least until a regular meeting in Abu Dhabi on December 5.
New York's benchmark oil price rose back above $95 on Friday to close at $95.10 per barrel while London's Brent North Sea crude climbed $1.39 to settle at $91.62 per barrel.
Security is extremely tight, with the streets of the centre of the city closed and residents enjoying an extra two days of leisure time after local authorites declared Saturday and Sunday public holidays.
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