TEHRAN (FNA)- A senior Iranian oil official said despite a current surge in oil prices, the world oil cartel does not need to hold an emergency meeting.
Iran’s OPEC Governor Hossein Kazempour Ardebili told Reuters in Tehran that he does not expect OPEC to hold and emergency meeting before its regular meeting in September.
He repeatedly said the market was well-supplied and rising oil prices had nothing to do with supply.
officials from the world’s fourth-largest oil producer have repeatedly said the market was well-supplied with crude and blamed record high prices on the weak dollar and other factors outside OPEC’s control.
ministers and officials from the Organization of the Petroleum Exporting Countries insist that supply is adequate despite pressure from the United States and other major consumer countries for more oil to lower the price.
Oil Minister Gholam Hossein Nozari last week said it would be possible to see a price of $200 per barrel for crude if existing conditions in the market continued.
Another senior Iranian energy official, Mohammad Ali Khatibi, said on Saturday that the weak US dollar was the main reason behind record oil prices, not demand or supply factors.
“We must be aware that it is not the price of crude oil that has risen but the dollar value that has weakened,” said Mohammad Ali Khatibi, deputy director of international affairs at the National Iranian Oil Company.
“Currently the prices of crude oil do not follow supply and demand and they will gain moderation in the event of improvement in (the value of) the dollar,” he was quoted as saying by the Oil Ministry website Shana.
Khatibi was speaking a day after US crude oil futures jumped to a record above $126 a barrel, extending gains to more than 11 percent since the start of the month on fuel supply concerns and a rush of speculator buying.
The steady rise in crude oil prices has turned the spotlight on the Organization of the Petroleum Exporting Countries (OPEC), which for months has insisted it has no control over the factors it blames for pushing up the price of oil, including speculation and the weak US dollar.
Iran is the world’s fourth-largest oil producer and OPEC’s second largest exporter.
“I believe there is a direct relationship between the drop in the value of the dollar and hike in the price of oil,” Khatibi said, adding oil prices rose eight percent in the first quarter of 2008 after the dollar fell as much the previous quarter.
On Thursday, Iran’s Oil Minister Gholam Hossein Nozari said it would be possible to see a price of $200 per barrel for crude if existing conditions in the market continued.
Nozari said the reasons behind the surge in oil prices were the weak US dollar and supply concerns from Nigeria.
There are concerns that violence in Nigeria will also impact production. Royal Dutch Shell Plc’s Nigerian output, which was cut by militant attacks, is likely to return within two weeks, a government official said yesterday. Shell is losing about 164,000 barrels a day as a result of political violence in the country.
Abdalla Salem El-Badri, secretary general of OPEC – the cartel of 13 countries which produces 40 per cent of the world’s oil – also said on Thursday, “There is clearly no shortage of oil in the market.”
OPEC’s current output is around 32 million barrels per day, compared with global production of 85 million barrels. El-Badri also underscored OPEC’s view that price volatility has been driven by speculation by hedge funds.
Market analysts also took Bush administration responsible for the price hikes caused by Iran concerns, saying that it is the “rumors of US action against Iran circulating in the markets” that affected oil and the dollar.
Iran said last Monday it would reject any offer that violates its right to master the full nuclear fuel cycle after world powers said they had prepared a so-called new package to end the atomic crisis.
But, Tehran has announced that it has its own package of nuclear proposals which includes solution to many world problems, including Tehran’s nuclear standoff with the West.
The United States and its Western allies accuse Iran of trying to develop nuclear weapons under the cover of a civilian nuclear program, while they have never presented any corroborative document to substantiate their allegations. Iran has denied the charges and insisted that its nuclear program is for peaceful purposes only.
Tehran stresses that the country has always pursued a civilian path to provide power to the growing number of Iranian population, whose fossil fuel would eventually run dry.
Iran is under three rounds of UN Security Council sanctions for turning down West’s illegitimate calls to give up its right of uranium enrichment, saying the demand is politically tainted and illogical.
Iran has so far ruled out halting or limiting its nuclear work in exchange for trade and other incentives, and says it will only negotiate with the UN nuclear watchdog.
Tehran has repeatedly said that it considers its nuclear case closed after it answered the UN agency’s questions about the history of its nuclear program.
Record-breaking oil prices have sparked widespread international concern among consumer nations.
The Organization of Petroleum Exporting Countries has already rejected the call by the US and some of its European allies, with OPEC Secretary General saying last month that there was no need to increase output to counter soaring oil prices.
Iran’s OPEC Governor Hossein Kazempour Ardabili had earlier said at the 11th International Energy Forum (IEF) in Rome last month that pressures on producer countries to raise oil output are politically driven.
“Oil spikes have nothing to do with demand and supply. The world’s oil reserves are at their highest level and there is enough energy in the market,” Kazempour Ardabili said.
The Iranian official blamed stock market slumps in the developed countries, including the United States and the continued depreciation of the US dollar, coupled with low interest rates, for the soaring oil prices.
His remarks came after earlier comments by many world analysts and OPEC officials, including Iran’s oil minister Gholam Hossein Nozari, that members of the oil cartel had no role in oil spikes since the high prices are a function of factors other than demand and supply.
Kuwaiti Oil Minister Mohammad al-Olaim last week said that OPEC may hold an extraordinary meeting on oil prices before a scheduled conference in September and did not appear to rule out higher production.
However, Libya’s acting oil minister Chukri Ghanem recently indicated that the Organization of the Petroleum Exporting Countries could not pump more crude.