Attack Iran and oil will hit $200, Chavez warns

Riyadh, NU Online
Outspoken Venezuelan President Hugo Chavez has warned the United States that oil would skyrocket to US$200 per barrel if it invaded oil-rich Iran, and called on other members of the world's oil cartel help poor developing countries cope with high oil prices.

Speaking at the opening of the third summit of the Organization of Petroleum Exporting Countries (OPEC) here on Saturday evening, Chavez used the forum to speak to the United States, accusing it of running after oil when it invaded Iraq and engineering a failed coup against him a few years back.

"If the United States is crazy enough to invade Iran, oil prices will shoot up not to US$100 but $200 per barrel," Chavez said.

"We need stability, peace. We (OPEC) guarantee stability in supply, but what in return do they give us?" he added. "OPEC must changes and becomes a stronger geo-political and geo-economical player."

Speaking after Chavez, host Saudi King Abdullah bin Abdulaziz rejected the notion that oil could be used as a weapon.

"Oil should not be used as a means of disputes and conflicts but as a means of reaching progress for the international community," the king said.

Chavez, however, reminded the heads of state attending the summit that OPEC was founded to fight imbalances in the world, and the first OPEC summit in Algiers in 1975 issued a declaration condemning the lack of discipline in international monetary systems, which eventually led to inflation and economic deterioration in developing countries.

"The declaration illustrates that this organization was created as a revolutionary body," he said.

He also spoke of the "happy period of the 1990s", which almost destroyed OPEC when oil prices dropped. At the time, he said, his country called for a second summit of OPEC, and eventually it was convened in Caracas in 2000.

He described the Caracas' summit as a "rebirth of OPEC" and said since then OPEC had seen oil prices go up from US$10 a barrel to nearly US$100 now, which he considered to be equal to the price of US$35 in the 1970s."The $100 per barrel is a fair price, it's a just price," he was quoted by The Jakarta Post as saying.

As OPEC is now regaining its strength, Chavez proposed that OPEC countries pool resources to help poor countries being affected by the "fair price" of oil.

He proposed that OPEC countries establish an OPEC bank and sell crude oil to poor countries at a discounted price.

King Abdullah later announced that his country would provide US$300 million toward a fund to establish an international program for scientific research into energy, the environment and the climate change.

He called for a comprehensive study on oil, the environment and climate change, which he proposed be handled by an independent body free from political pressures and influence.

"It has been said that oil has an impact on climate. This is false. Such arguments tend to mix facts with fantasies," he said, adding that any linking oil to climate change should be based on science and solid research. (dar)