Chavez threatens $200 oil
U.S. attack on Iran would double prices, OPEC summit told
Shaun Polczer
CanWest News Service
Sunday, November 18, 2007
RIYADH, Saudi Arabia - Oil prices could more than double to $200 US a barrel if the United States attacks Iran, Venezuela's Hugo Chavez told OPEC leaders in Saudi Arabia Saturday, urging the cartel to take a more active "revolutionary" role in world affairs.
"If the United States was mad enough to attack Iran or threaten Venezuela again then the price will not be $100, it will be $200," Chavez said as his Iranian counterpart, Mahmoud Ahmadinejad, looked on.
Calling $100 "a fair price, a just price" Chavez electrified the third summit of OPEC's heads of state with a fiery speech that called for member nations to take a more aggressive role in battling poverty and injustice in developing nations.
"The basic reason for all this aggression is oil. We have seen it in the situation in Iraq and the threats against Iran," he said.
Saudi officials sat stone-faced as Chavez extolled the Cuban revolution and exhorted his OPEC colleagues to take a hard line against consuming nations, especially the United States.
Contradicting one of the basic themes of the summit, Chavez said "it's not OPEC's role to guarantee supply ... OPEC must change and become a much stronger player in the geopolitical domain."
All week Saudis have taken pains to portray the kingdom as a reliable supplier, with the slogan: "Providing petroleum, promoting prosperity and protecting the planet."
Chavez's comments appeared to earn a rebuke from Saudi King Abdullah, who said it is OPEC's responsibility to safeguard the world economy.
"The prosperity of the world is common and shared," he said, calling for "bridges and dialogue" between producing and consuming nations.
"Oil shouldn't be a tool for conflict, it should be a tool for development," he said. "Our organization has consistently upheld these objectives."
Abdullah committed $300 million to fund climate-change research, including technologies to capture and sequester carbon dioxide, which has been pegged as a cause of global warming.
Likewise, OPEC's secretary general, Abdalla Salem el-Badri, urged "transparency and predictability" in the cartel's policies and said OPEC's role ought to be "market stabilization."
He sought to reassure consumers that "petroleum resources in member countries are sufficient to meet increased demand."
The comments underscored the divisions between OPEC's hawks, led by Chavez, and the desire of Saudi officials to avoid a backlash that would reduce U.S. demand for OPEC oil. The United States, the world's largest consumer, uses a quarter of the world's oil, or some 21 million barrels a day.
As a growing supplier, Canada is seen as one way for the United States to lessen its dependence on imported oil from both Venezuela and the Middle East.
Canada produces a quality of heavy oil that is similar to Venezuela's Orinoco belt, and supplies from Alberta's oilsands have steadily been trickling south.
Earlier this year, the Spearhead pipeline began delivering heavy oil to Cushing, Okla., while construction of TransCanada Corp.'s Spearhead has been approved to send oilsands output to the Gulf Coast.
When the current round of oilsands expansions comes online after 2010, Canada will become the world's third-largest producer, ahead of all OPEC producers except Saudi Arabia.
That prompted Saudi oil minister Ali Al-Naimi last week to roll out the red carpet for Canada to join OPEC. In a special ceremony Sunday, OPEC will formally induct Angola and Ecuador into the club of 13 nations, while Brazil is also reportedly interested in joining after a multibillion barrel discovery.
Meanwhile, Chavez invoked the ghost of Ronald Reagan, insisting that the former U.S. president sought to bring the cartel "to its knees ... and almost succeeded" while taking credit for prices that have risen 10-fold since the last OPEC summit in Caracas in 2000.
"Today, OPEC stands strong as it ever has been in the past."
