[NYTr] Chavez Warns Us At Opec Summit

[All the News That Doesn't Fit]

Al Jazeera English - Dec 5, 2007
http://english.aljazeera.net/NR/exeres/15E6590A-E541-4142-A58F-B1929C670047.htm


Chavez warns US at Opec summit

Venezuela's president has warned that oil prices could more than double
if the US attacks his country or Iran.

  In his opening address on Saturday at a rare Organisation of the
Petroleum Exporting Countries summit in Riyadh, the Saudi Arabian
capital, he declared that the group should "assert itself as an active
political agent".

         "If the United States was mad enough to attack Iran or aggress
Venezuela again the price of a barrel of oil won't just reach $100 but
even $200 dollars," he said.

  Saudi Arabia, the world's biggest oil producer, rebuffed Chavez's
idea of Opec becoming an overtly political organisation.

         "Oil is an energy for development, it should not become a tool
for conflict and emotions," King Abdullah, the Saudi monarch, said.

  Chavez is due to arrive in the Iranian capital Tehran on Sunday to
hold talks with Mahmoud Ahmadinejad, Iran's president.

  Saudi salvo   The two-day summit is only the third in Opec's 47-year
history.

  Oil, finance and foreign ministers of Opec are meeting against a
backdrop of a depreciating US dollar and tension in world oil markets.

  Chavez said on Saturday: "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. We are witnessing
constant threats against Iran."

In his speech, King Abdullah said: "Those who say that Opec should be a
manipulative monopoly are ignoring the fact that Opec had always
behaved moderately and wisely."   The Saudi king also tried to redirect
the Opec opening session to the summit's agenda, announcing a move to
support environmental efforts.

He said: "I wish to announce that the Saudi government has put $300m in
a programme to finance scientific research in the fields of energy,
environment and climate."   As the talks entered a second day on
Sunday, other Opec members had not committed to the Saudi plan.

  Rafael Correa, president of Ecuador, which has rejoined Opec after a
15 year break, proposed that a tax be imposed on oil-consuming nations
for environmental protection programmes elsewhere.    Dollar debate
Earlier this week, Samuel Bodman, the US energy secretary called on
Opec to increase production in order to halt oil price rises.

  But Opec officials said they will not discuss whether to increase oil
supplies until the group meets next month in the United Arab Emirates.

They also cast doubt on the effect any output hike would have on oil
prices, saying the recent rise has been driven by the falling US dollar
and financial speculation by investment funds, rather than any supply
shortage.

  Saudi Arabia, a close US ally, objected on Saturday to an attempt by
Iran and Venezuela to highlight concern over the weakness of the US
dollar.

  A closed session of foreign and finance ministers voted against the
proposal.

  Abdalla Salem el-Badri, the Opec secretary-general, said the group
had decided not to mention concern over dollar depreciation in the
declaration.

  Saud al-Faisal, the Saudi foreign minister, told the session: "My
fear is that any mention that Opec makes of studying the issue of the
dollar will in itself have an impact."   Microphone mix-up   A
microphone mistakenly left on meant that the comments of al-Faisal were
accidentally broadcast to journalists on Saturday.

  He rejected the proposal by Iran and Venezuela who wanted the meeting
to discuss the weak dollar, saying: "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."   Embarrassed organisers switched
off the microphones after the comment.

Opec is under pressure to increase its output to help calm record crude
prices that reached almost $100 a barrel for the first time last week.

  Some Opec members want to increasingly sell their oil in euros and
not dollars.

  The Gulf Arab states and Saudi Arabia earn more than a billion
dollars a day from oil sales.

  Mamdouh Salameh, an international oil expert, told Al Jazeera: "Saudi
Arabia and Kuwait are under the US military umbrella. Consequently, it
will be anti-American decision if they shift to another currency other
than the dollar."   Dollar's weakness   Concern is growing, however,
that the dollar's weakness signals the end of its reign as the world's
main international currency.

  The dollar would be further damaged if Opec started selling its oil
in euros or created a basket of currencies as some producers now want.

  Saudi Arabia's investments in the US - and many other countries - are
also threatened by a weaker dollar.

  The dollar has fallen 10 per cent against the euro this year, hitting
oil producers' income.

  The falling dollar has also made imports much more expensive, with
Gulf countries particularly affected.

  Inflation has risen dramatically, affecting low paid foreign workers
especially hard.

  Now Gulf currencies, such as the UAE dirham which has been pegged to
the dollar for the past 30 years, could be unpegged because of growing
pressure.