Mon, Nov 19, 2007 - Page 1 News List

Chavez opens OPEC meeting with warning

'MAD ENOUGH' Calling on OPEC members to band together in these trying times, the Venezuelan firebrand said an attack on Iran could result in oil prices reaching US$200


Venezuelan President Hugo Chavez opened an OPEC summit on Saturday with a chilling warning about US$200 oil if the US attacks Iran in a speech that also urged the cartel to be more political.

But internal divisions about the role of the oil exporters' group were highlighted when King Abdullah of Saudi Arabia, OPEC kingpin and key US regional ally, sounded a moderate note, saying oil "must not become an instrument for conflict."

Chavez, a fiery leftist and fiercely anti-US leader, warned that crude prices could double from their current already-record level of near US$100 a barrel if Washington attacked Iran or launched action against Venezuela.

"If the United States was mad enough to attack Iran or aggress Venezuela again the price of a barrel of oil won't just reach US$100, but even US$200," he said.

He also urged assembled leaders from OPEC, meeting for only the third time in the cartel's 47-year history, to band together for geopolitical reasons.

"Today OPEC stands strong. It is stronger than it has ever been in the past," he said. "OPEC should set itself up as an active geopolitical agent."

King Abdullah defended the aims of the cartel, which controls the output of its members to influence world crude prices, in a speech that was in stark contrast in content and style to the Venezuelan's.

"Those who say that OPEC is a monopolistic organization are ignoring the fact that OPEC always behaves in a moderate and wise manner," he said.

He said proof of this was that current prices of near US$100 per barrel were lower than the prices of the 1980s when inflation was taken into account.

OPEC's membership is dominated by pro-Western Gulf states but includes an anti-US bloc of Iran and Venezuela.

The group has a history of using its oil exports as a political weapon -- members ceased exports in 1973 in protest to Israel's invasion of Syria -- but now Saudi Arabia likes to stress the purely economic and technical agenda of the group.

The summit is intended to map out the strategic direction of the OPEC, which produces about 40 percent of world oil, but the group is divided on a number of issues.

Another leftist ally of Chavez in South American, Ecuador, sealed its widely expected return to OPEC on Saturday, swelling the ranks of the group to 13.

Chavez made a series of blistering attacks on the US and also posited that oil was the source of all conflict.

"The basis of all aggression is oil. It is the underlying reason," Chavez said, pointing to the war in Iraq and US threats against Iran because of the Islamic republic's disputed nuclear program.

The event 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.

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