Hugo Chavez, the Venezuelan president, has warned that oil prices could surge to $200 if America attacks against his country or Iran.
In his opening address at a rare Organisation of Petroleum Exporting Countries (Opec) summit in the Saudi capital, he declared that Opec should "assert itself as an active political agent".
But minutes after Chavez's speech in Riyadh on Saturday, Saudi Arabia's king Abdullah said: "Oil is an energy for development, it should not become a tool for conflict and emotions."
Saudi salvo
Oil, finance and foreign ministers of Opec are meeting against the backdrop of a depreciating dollar and tension in world oil markets.
Chazez said: "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 US$300m in a program to finance scientific research in the fields of energy, environment and climate."
The two-day summit is only the third in Opec's 47-year history.
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 or not 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.
In a closed session of foreign and finance ministers, Saudi Arabia, a close US ally, objected to a bid by Iran and Venezuela to highlight concern over the weakness of the US dollar.
The group voted the proposal out.
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."More on the story.
1 comment:
"Concern is growing, however, that the dollar's weakness signals the end of its reign as the world's main international currency. And the greenback 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. This has hit oil producers and slashed income"
Not the positive theme the US would like, even after Bolton said they need to increase production, well we have money no one wants any more so what influence are we going to have?
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