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Thursday, October 28, 2021
CARACAS, Nov 16 2007 (IPS) - The Organisation of Petroleum Exporting Countries (OPEC) is not likely to give in to pressure from consumer nations to curb record high oil prices after this weekend’s meeting of OPEC heads of state and government in Riyadh.
The summit, the third in OPEC’s history, will focus on medium to long-term strategies for meeting world demand for oil, promoting prosperity and protecting the environment.
The OPEC ministerial conference slated for Dec. 5 in Abu Dhabi may also fail to decide on measures aimed at moderating prices, which are closing in on 100 dollars a barrel.
"The thing is, for now OPEC can increase prices, but it can't bring them down," Elie Habalián, a retired professor and former representative of Venezuela at OPEC, told IPS.
"OPEC shouldn't be blamed for the price of oil, it's out of our hands,'' said Qatari Oil Minister Abdullah al-Attiyah. ''It's speculators who are putting money in oil.''
OPEC argues that the market, which in 2007 has consumed just under 86 million barrels of oil a day, is well-supplied, and that in response to demand it increased output among its 12 members to 31 million barrels a day.
Algerian Energy and Mines Minister Chakib Khelil said "If we increase, we are going to have the same phenomenon that happened before, which means it may not even impact on the price."
Although OPEC boosted supply over the last year, prices remain 40 percent higher than in 2006.
Habalián said the cartel’s members "are pumping practically at capacity."
The leaders of the OPEC nations – Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela – will be joined by Ecuadorean President Rafael Correa this weekend in Riyadh.
Ecuador plans to rejoin the organisation, 15 years after it pulled out.
The first OPEC summit, held in 1975 in Algiers, two years after the oil crisis, called for a North-South dialogue on a new international economic order, towards which some progress was made at a 1977 Conference on International Economic Cooperation in Paris.
The second summit, hosted by Caracas in 2000, breathed new life into the cartel in a new global context marked by a thirst for oil, after the organisation had gone through hard times: the 1980-1988 war between Iraq and Iran, and a collapse in demand, investment and oil prices, which plunged below 10 dollars a barrel in the 1990s.
When the OPEC leaders gather Saturday and Sunday in the capital of Saudi Arabia, they will call for "stabilising world energy markets by supplying the world's petroleum needs in a way that meets consumers' and producers' needs," in the words of the organisation’s Secretariat General.
Al-Badri said that OPEC, whose members supply 40 percent of global oil consumption, have nearly 80 percent of global reserves, and are in need of major investments to increase output, would not use oil as a "political weapon."
For his part, Nigerian Energy Minister Henry Ajumogobia said OPEC would like to see more cooperation with non-members, in order to bolster global production capacity and bring about greater stability in the markets.
With respect to its aim to "promote prosperity," OPEC plans to not only focus on global economic growth, but also on development for all of the world’s communities, according to the draft final declaration to be signed at the summit.
Venezuelan President Hugo Chávez said OPEC, whose members will take in 700 billion dollars in gross income from oil exports this year, could establish a humanitarian fund of up to 100 billion dollars to fight poverty in Africa, Asia and Latin America.
In 1976, OPEC created the Fund for International Development, which has approved nine billion dollars in financing, with some six billion dollars actually disbursed so far for small projects in the three regions of the developing South.
With regard to the environment, OPEC will adopt a new strategy, based on an understanding that energy must be supplied in the most responsible way possible.
One OPEC proposal is to create a three billion dollar fund, for which it would provide one-third of the financing, for research and development of initiatives aimed at reducing carbon emissions.
The draft declaration states that in terms of energy and the environment, "carbon storage could reduce the impact of fossil fuels on climate change and developed countries have the technology on this."
Al-Badri also said that OPEC has no plans to price oil in any currency other than dollars.
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