Iran Terms Weak Dollar Major Contributor to High Oil Prices

A04702525.jpgTEHRAN (FNA)- The falling value of the dollar is to blame for around a third of the rise in the price of oil, Iran’s Foreign Minister Manouchehr Mottaki said on Saturday.

“Thirty percent of the increase (in the price) of oil is because of the decrease in the value of the dollar,” he said on the sidelines of the South Asia Association for Regional Cooperation (SAARC) summit in the Sri Lankan capital Colombo.

He did not say what time period he was referring to. The dollar has dropped 33.8 percent against a basket of six currencies since US President George W. Bush took office on January 20, 2001, according to the New York Board of Trade’s dollar index .DXY.

Mottaki also said unspecified behind-the-scenes actions had played a role in the oil price increase, and that Iran supported “the stability of the oil price in the market”.

Iran has repeatedly said the market is well-supplied and blames rising prices on speculation, a weak dollar and geopolitical tension. Iran also blames sanctions that have been imposed against Tehran as another major contributory factor to the rise in prices.

OPEC members have long maintained that factors beyond their control, such as speculation, a weakening US dollar, inadequate refining capacity and geopolitical tensions are behind the drive in crude oil prices.

Iran is the world’s fourth-largest crude oil producer and tension created by the US-led West over its nuclear program helped push crude prices to record highs above 147 dollars a barrel on July 11.

Analysts view geopolitical factors as among the main causes of recent hike in prices, saying that fears of a new Middle East conflict are behind the new high for oil prices.

Market analysts, specially those from consumer nations, take Bush administration responsible for the price hikes in recent months, saying that it is the “rumors of US and Israeli action against Iran circulating in the markets” that affected oil and the dollar.

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 denies the charges and insists 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 insists that it will continue enriching uranium because it needs to provide fuel to a 300-megawatt light-water reactor it is building in the southwestern town of Darkhoveyn as well as its first nuclear power plant in the southern port city of Bushehr.

Iran 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.

Political analysts believe that the US is at loggerheads with Iran due mainly to the independent and home-grown nature of Tehran’s nuclear technology, which gives the Islamic Republic the potential to turn into a world power and a role model for other third-world countries. Washington has laid much pressure on Iran to make it give up the most sensitive and advanced part of the technology, which is uranium enrichment, a process used for producing nuclear fuel for power plants.

Washington’s push for additional UN penalties contradicted the report by 16 US intelligence bodies that endorsed the civilian nature of Iran’s programs. Following the US National Intelligence Estimate (NIE) and similar reports by the IAEA head – one in November and the other one in February – which praised Iran’s truthfulness about key aspects of its past nuclear activities and announced settlement of outstanding issues with Tehran, any effort to impose further sanctions on Iran seems to be completely irrational.

The February report by the UN nuclear watchdog, the International Atomic Energy Agency, praised Iran’s cooperation in clearing up all of the past questions over its nuclear program, vindicating Iran’s nuclear program and leaving no justification for any new UN sanctions.

Not only Iranian officials, but also many other world nations have called the UN Security Council pressure unjustified, saying Iran had increased cooperation with the agency.

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