OPEC Marks 50th Anniversary
"We are trying to work closely with the EU and other countries in order to
assure stable oil supply to those countries."
Organization of Petroleum Exporting Countries (OPEC) traveled to Iran to take
part in ceremonies marking the 50th anniversary of the
organization. He said, "Iran is an important country, so I made it here
despite bad health. I am honored to be in a country which was a founder of
Salem al-Badri is from Libya and became elected secretary-general through
consensus. For three years, OPEC was without a secretary-general because Iran
claimed the post and other members disagreed. Finally, al-Badri was chosen as
a moderate candidate. He said, "Since 50 years ago we have been able to
achieve a lot in OPEC. Before establishment of OPEC, oil majors did not care
for the rights of producing countries, but after it was established, oil
producing countries got together despite various viewpoints to protect their
interests." He added that the ceremony was being held at a time of tumult in
international oil market, but expressed hope that using past experiences OPEC
will be able to overcome all difficulties. He also emphasized on the need to
keep the market stable.
OPEC is a responsible organization
pointed to the ongoing crises in the Middle East and the tsunami in Japan all
of which he said, have influenced the oil market. Without going into details,
he expressed hope that a solution will be soon found for such problems. Salem
Al-Badri assured the oil market that there was no shortage in production and
supply. He added, "OPEC member states can produce 4.5 million barrels of
surplus oil. Therefore, we are flexible enough to make up for possible
shortages." He stated that the current production level will continue up to
December blaming oil price hike on existing concerns in the market and the oil
tax levied by consumer countries. He said the organization will try to do its
part to prevent oil shortage in the market and do its best to supply
called OPEC a responsible organization and noted that when oil prices fell due
to economic recession, an agreement among members proved effective in 2008.
OPEC agreed in its 2008 meeting in Algeria to reduce output when oil prices
had fallen about 30-40 dollars per barrel. He said that eradiation of poverty
in member countries and protecting their economic, energy and environmental
interests in addition to stability in the oil market and sustainable supply
were major concerns of OPEC.
As for G-8 countries, secretary-general of OPEC called on them to reduce
taxes on oil and its products because their revenues were higher than
those of oil producers.
official called for more dialogue among countries on oil.
trying to work closely with the European Union and other countries in order to
assure stable oil supply to those countries." The OPEC secretary-general
concluded by saying that Iran as a founding country has always surprised the
world with its achievements.
fluctuation and management of
the (former) Iranian Minister of Petroleum Seyed Massoud Mirkazemi, who is the
rotating head of the OPEC Conference for 2011, took to the podium saying that
the main goal of OPEC is to protect the interests of member countries and to
stabilize the oil market.
established in 1960 according to a proposal by the then Venezuelan minister of
petroleum, which was supported by
Iran, Saudi Arabia, Kuwait, Iraq and
Venezuela. Iran has played a key role in OPEC since its inception. Foad Rohani
was the first secretary-general of the organization. Now, OPEC accounts for 40
percent of total oil output and 80 percent of oil reserves. The Iranian
minister said, "We need to respect sovereignty and rights of oil producing
further noted that the main cause of economic crisis is issuing instruments
which have no economic support. He added that this was a major concern for
OPEC because the current crisis cannot be the last of its kind. He then asked
who is paying the cost of mothballed investments in producing countries to
which he answered, "Demand is of the highest importance to OPEC because oil
reserves in many countries are past their half-life and need fresh
investment. Therefore, security of demand should be assured to guarantee
noted that another challenge facing OPEC was the oil price. He said, "One
ounce of gold was traded for 35 dollars in 1970 and is now is sold for 1,460
dollars. Therefore, oil price is actually much lower that it was back then."
He said the oil price fluctuations have caused difficulties for oil producing
on negotiation with Iraqis
to investment of surplus capitals of producing countries in bubbly markets of
consumer states, Mirkazemi called that trend menacing. Remembering his
conversation with an Iraqi official who was proposing an output hike up to 11
million barrels per day, he said, "I asked them why they wanted to produce so
much oil and the Iraqi official said they wanted to be the first in the
region. This attitude is not good."
make capacities in their oil industries to earn higher revenues when prices
are higher. Mirkazemi said nothing about why such investment should not be
made in economic infrastructures of a producing country. The Iranian minister
of petroleum mentioned speculation as a problem for OPEC and alluding to
unilateral output hike by Saudi Arabia and Kuwait, he said that unilateral
measures will not help stability of the oil market.
the crisis in Libya, Saudi Arabia increased its oil production to stabilize
the market. The Iranian minister opined that coordination with all OPEC
members was key to stability of the oil market. He then sent out his political
message by saying that the current political conditions governing the oil
market were not good because oil was an economic commodity. "The world cannot
secure energy supply by deploying armies to oil producing countries. I think
that politics should be taken out of the oil marketů. Iran can beef up energy
security in the world," he said.
the same ceremony a memorial stamp marking the 50th anniversary of
OPEC was unveiled. The Iranian oil minister then joined the press crew after
secretary-general of OPEC. Salem al-Badri told reporters that in view of the
current developments in Arab countries, if a change in oil market was needed,
OPEC would be ready for it. The OPEC secretary-general said oil reserve will
hold out for 58 days provided that there are no problems with refineries and
OPEC used all its resilience to supply oil.
G-8 countries, secretary-general of OPEC called on them to reduce taxes on oil
and its products because their revenues were higher than those of oil
producers. "Therefore, we ask countries that levy those taxes to reduce them,"
he said. Answering another question, Al-Badri tried to avoid forecasting oil
Persian daily asked him about how much of the current oil price was due to
political crises and whether the oil price would fall below 100 dollars per
barrel by the end of 2011. He said, "We are witnessing a risk of 20-50 dollars
per barrel for political crises. In view of conditions in Libya, oil markets
are adapting themselves to new conditions. Of course, the Libyan oil is
light and sweet and hard to be replaced. It is possible that turmoil may
occur in other countries. Therefore, it is difficult to estimate the oil
price, but I think that it will not fall below 100 dollars per barrel before
the end of 2011."
As for optimal price of OPEC oil, the secretary-general remained silent.
However, he said, "Oil price is not determined by OPEC. We need prices which
would enable us to make investments and keep the flow of cash." Al-Badri said
downturn in oil prices will not benefit producing countries.