- The Washington Times - Monday, September 25, 2000

CARACAS, Venezuela President Clinton's efforts to push down oil prices drew clashing reactions yesterday from OPEC leaders, who find themselves under immense pressure to boost production as they gather for their first summit in 25 years.
What had been billed as a feel-good summit on the long-term strategy of the Organization of the Petroleum Exporting Countries (OPEC) has become a wild card that will gauge the 11-nation cartel's efforts at solidarity.
"We are not going to allow ourselves to be pushed into [releasing] more oil than the market needs," OPEC Secretary-General Rilwanu Lukman of Nigeria insisted yesterday. "The last time we did that, the prices went down to $10 a barrel … and nobody was sorry for us."
Venezuela, which holds the cartel's rotating presidency, insists that OPEC is unified and that no production decisions will be made during the summit, which runs from tomorrow through Thursday. That issue will come up at an OPEC meeting in Vienna in November, members say.
Some observers aren't so sure. OPEC President Ali Rodriguez conceded last week that cartel leaders could make some production decisions only to reverse that stance. As for OPEC discipline, Mr. Rodriguez also has acknowledged reports that OPEC exceeded its quotas by up to 1 million barrels a day.
Venezuelan President Hugo Chavez declared yesterday on his weekly radio call-in show, "Hello Mr. President," that "the OPEC summit is blessed by the hand of God," a high-profile forum for leaders of developing nations to confront what they call unfair terms of trade in this era of globalization.
Referring to foreign complaints about oil prices, Mr. Chavez told his nationwide audience: "How nice it would be if they also lowered prices for the things they sell us, lowered the prices of computers, of medicines, of cars and the interest rates on foreign debts."
OPEC has boosted output this year by a total of 3.2 million barrels a day in a failed effort to cool prices. Supplies remain extremely tight, largely because of the strong U.S. economy and an economic rebound in Asia.
OPEC members point accusingly at consuming nations' high taxes on gasoline, diesel, heating oil and other products, as well as refining and shipping bottlenecks, as the culprits behind high prices.
Yet heading into the summit, some OPEC nations differed in their reactions to Mr. Clinton's decision to inject 1 million barrels of oil a day into the market for 30 days to push prices down.
Venezuela embraced the move, predicting it would provoke a sharp decline in oil prices this week. Mr. Lukman agreed, saying the move will "contribute to moderating the petroleum market."
Saudi Arabia, traditionally the closest U.S. ally among OPEC members, criticized Mr. Clinton's decision as "an election ploy requested by Al Gore." U.S. officials say the Saudis, the world's biggest oil producers, have since assured them they aren't too upset.
Iraq, with the world's second-largest oil reserves, said Mr. Clinton's decision will only destabilize what it called "greedy markets."
One unifying point among OPEC members is their insistence that consumers look at the taxes they're paying.
"If the consuming countries want to lower prices for their consumers, the correct thing to do is not only to ask us to lower the prices of crude which we are doing anyway but also to moderate their taxes, which are exuberantly high," Mr. Lukman said.
Venezuela's Mr. Rodriguez said that while crude oil prices have dropped 41 percent in real terms since 1991, European Union nations have raised oil taxes by 350 percent. Still, the world's wealthiest nations, meeting this weekend in Prague, ruled out lowering oil taxes and insisted on more oil.
OPEC ministers fear overproduction could plunge prices as in 1998, when a $10-per-barrel price pushed Venezuela's 23 million people into a recession from which they are still struggling to escape. Venezuela gets 60 percent of its revenues from oil.
Heads of state and oil ministers from Saudi Arabia, Algeria, the United Arab Emirates, Indonesia, Iraq, Iran, Kuwait, Libya, Nigeria, Qatar and Venezuela are attending the summit, as well as observers from other oil countries. OPEC produces more than 40 percent of the world's petroleum and holds 75 percent of proven reserves.

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