MercoPress. South Atlantic News Agency

“Weak US dollar” at the heart of the OPEC Riyadh summit

A blunder by OPEC on Friday exposed serious discrepancies between Saudi Arabia and Iran about whether the oil exporters' group should address the issue of the falling dollar at a rare summit of leaders this weekend in Riyadh.

Saudi Arabia appeared to have prevailed and the dollar is not expected to be mentioned in a final declaration by leaders, but the incident highlighted differences at the heart of the group, which includes both US allies and foes. In an embarrassing oversight, a private meeting of foreign, finance and oil ministers from the 12 members of the Organisation of Petroleum Exporting Countries was broadcast for 30 minutes on closed-circuit television in the media room. Journalists witnessed Iran request that the final declaration to be issued by OPEC leaders at the end of the summit on Sunday should express the concern of member states about the falling US currency and its impact on oil revenues. Reacting to the proposal, Saudi Foreign Minister Prince Saud al-Faisal warned that mentioning the falling dollar could lead to the "collapse" of the US currency. "There are media people outside waiting to catch this point and they will add to it (exaggerate) and we may find that the dollar collapses," he said. Prince Saud, who was chairing the meeting to draw up the declaration before leaders arrive on Saturday, described the Iranian proposal as "sensitive." "This is a sensitive issue. It will cause the dollar to drop further, thus complicating the problems we are facing from the dollar's fall," he added. As the meeting broke up and ministers left, OPEC's secretary general was adamant that the dollar would not be mentioned in the final communiqué. "Let me be clear: the dollar will not be in the final statement," he told reporters. "It is an individual country issue," he added, meaning the subject would not be tackled at the level of OPEC.. Iranian Foreign Minister Manouchehr Mottaki said during the meeting that OPEC should express concern over "the continued depreciation of the US dollar" in an initiative backed by fellow US adversary Venezuela. The fall of the dollar, which has declined by about 15% in 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency. Saudi Arabia, the world's biggest oil producer, insists that OPEC remain a purely economic forum despite efforts by hawks in the organization, with Venezuela the leader, to politicize it. The remarkable insight into the inner workings of the Organisation of Petroleum Exporting Countries, which produces 40% of world oil, ended when a furious official emerged to switch off the television. The summit, which begins on Saturday, is only the third gathering of OPEC head of states in the organization's 47-year history. The gathering comes at a time of tension on world oil markets, with the cartel under pressure to increase its output to help calm record crude prices that threatened to breach 100 dollars a barrel for the first time last week. Venezuelan Energy Minister Rafael Ramirez forecast Friday that prices would soon break through the symbolic 100-dollar barrier. They are currently in the mid 90-dollar range. "We have been saying for years that oil is going to reach 100 dollars a barrel and it seems that is going to happen soon," he told reporters. Ministers have ruled out any increase in output, at least until another meeting next month, and leaders are expected to focus instead on climate change, development and ensuring long-term stability of prices in their final declaration.