OPEC Secretary to U.S.: Stop 'Harassing' Oil-Producing Countries

July 3, 2008
Oil powers and the U.S. deadlocked over oil prices.

Tensions have flared between the oil powers and consumer nations at the World Petroleum Congress this week, with no sign of common ground on how to bring down record crude prices.

After failing to find agreement at a hastily arranged summit in Saudi Arabia on June 22, this week's industry event in Madrid has frequently resembled a dialogue of the deaf with both sides sticking to their positions.

OPEC secretary general Abdallah El-Badri called on the United States to stop "harassing OPEC countries" on July 2, and Indonesian President Susilo Bambang Yudhoyono called for end to the blame game.

Consumer nations led by the United States are clamoring for more oil in a bid to cool the market.

But most members of the Organization of Petroleum Exporting Countries remain firmly against any increase in their production and blame speculators and the fall in the dollar for the remarkable run up in prices, which have doubled in the last 12 months.

OPEC secretary general Abdallah El-Badri July 2 denounced the "myth" of an oil shortage and blamed the crisis on speculation sparked by the subprime lending crisis in the United States.

"Seventy percent of crude contracts on the Nymex are held by speculators... Some form of regulation is needed," he told a luncheon at the WPC.

"The market has no shortage of physical crude," he said.

On July 1 however, energy watchdog the International Energy Agency laid the blame firmly on a lack of supply and future capacity and warned of looming new tensions from 2010.

Company bosses from Western oil majors have also cited fears of supply shortages caused by booming oil demand in Asia and the Middle East for the record crude prices of more than $140 a barrel.

In an interview with the Spanish newspaper El Pais on Wednesday, El-Badri criticised the IEA.

"With the current high level of prices, we cannot say that there will be tension on the market ... because it is not true," he said.

"At this price level, if there is demand, everyone will make investments and there will be more supply" in 2010, he said.

He also demanded the United States "stop harassing OPEC countries," when asked about a move by the U.S. Congress to allow the Justice Department to sue OPEC members for conspiring to restrict supplies or drive up prices.

Copyright Agence France-Presse, 2008

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