At historic gathering, OPEC rebuffs oil price pressure

Published September 28th, 2000 - 02:00 GMT

As OPEC held a historic gathering amid global concern over soaring oil prices, officials insisted Wednesday there was plenty of oil on offer, and that the cartel had done more than its share to stabilize markets. 

 

They also suggested industrialized nations should lower taxes on oil if they wanted to ease the burden on consumers."We have excess supply on the market," Iranian Oil Minister Bijan Namdar Zanganeh told journalists as OPEC ministers approved a final statement to be adopted at the full summit, that was to start later Wednesday. 

 

The gathering of sovereigns and presidents of the Organization of Petroleum Exporting Countries (OPEC) was only the second in the cartel's 40-year history. 

 

Echoing the words of other dignitaries at the Caracas meeting, Zanganeh said OPEC had done more than its share to drive down prices, notably by deciding to put an additional 800,000 barrels a day on the market as of October 1. 

 

Venezuelan President Hugo Chavez, the summit host, has said on several occasions over the past days that current prices were "just." Representatives of the 11-member cartel are expected to reiterate their commitment to market stability -- but have ruled out any concrete production increase to ease overheated markets. 

 

OPEC officials say that consumers angry over high gasoline prices should blame taxes and speculation, but not the oil-producing cartel. Participants said the declaration approved by ministers for adoption by the summit included a reference to the taxes. 

 

Some "cosmetic changes," requested by Iraq and Saudi Arabia, were made to the text during a meeting of foreign, finance and oil ministers, according to several of the participants. 

 

They said the summit would underline OPEC's willingness to hold a dialogue with consumer nations, something the Group of Seven leading industrialized countries and the European Union (EU) had requested. 

 

Chavez was set to address the issue in his closing remarks on Thursday, and officials said he would stress that such a dialogue could only take place as long as conditions for a "fair" discussions were set. 

 

"The only remedy against speculation is stability and the only manner to achieve stability is through an agreement between consumers and producers," said OPEC President Ali Rodriguez, who is also Venezuela's oil minister. 

 

The severity of the global oil crisis was underscored by the United States' decision last week to tap into the Strategic Petroleum Reserve (SPR), a move not taken since the Gulf War a decade ago.Signs emerged this week that the EU could also be considering drawing on its reserves if necessary. 

 

Rodriguez even claimed that some EU countries had already begun drawing on their reserves. He declined to identify the countries.But the Paris-based International Energy Agency said Wednesday that its members have "absolutely" no need to draw on stocks of oil. 

 

Soaring crude prices, which surged to 35 dollars a barrel in recent weeks, dipped in response to the US decision at the start of the week, but firmed again Tuesday ahead of the Caracas summit. 

 

The price spikes have sparked protests around the globe, and especially in Europe, where blockades initially in France have spread across the continent in the past few weeks. 

 

Leaders in Caracas include Iranian President Mohammad Khatami, Indonesian Abdurrahman Wahid, Nigerian President Olusegun Obasanjo and Iraqi Vice-President Taha Yassin Ramadan.—AFP. 

©--Agence France Presse. 

 

 

© 2000 Mena Report (www.menareport.com)

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