Iran joins Venezuela, Libya to say no harm in $100 oil

TEHRAN (Reuters) - OPEC’s leading oil price hawk Iran joined Venezuela and Libya Sunday to say it saw no need for the cartel to consider raising crude supplies to rein in crude prices now near $100 (£63) a barrel.

A worker checks the price of fuel at a gas station in Hong Kong January 14, 2011. REUTERS/Tyrone Siu

Iranian Oil Minister Massoud Mirkazemi said some members of the Organisation of the Petroleum Exporting Countries saw no need for producers to act even if prices went to $120 a barrel. The comments will be of concern for consumer countries worried that rising commodity costs are igniting inflation and jeopardising economic recovery.

“None of the OPEC members find $100 concerning or irrational. Some of the OPEC members see no need for an emergency meeting even with prices at $110 or $120,” Mirkazemi, OPEC president for 2011, told a news conference.

“None of the members have asked for an emergency meeting and I think for a long time there would be no such request,” Mirkazemi said.

As holder of the rotating OPEC presidency, Iran has responsibility for coordinating any emergency meeting with OPEC’s Vienna based secretariat. The next scheduled meeting is not until June 2.

Venezuelan Oil Minister Rafael Ramirez said Sunday that $100 was “fair value” for crude, a position that Libya also backs.

Benchmark Brent crude broke $99 a barrel Friday, a 27-month high, while U.S. oil futures rose to $91.54, well above the $70-$80 range that OPEC’s most influential member Saudi Arabia says is comfortable for both producers and consumers.


The comments from Iran, Venezuela and Libya will leave consumer countries wondering whether more moderate producer Saudi Arabia and its Gulf allies Kuwait and the United Arab Emirates are prepared to take action to prevent prices escalating further.

One delegate from a Gulf OPEC member state told Reuters on Thursday OPEC could hold an emergency meeting if oil prices “exceed $100 and stay there.

Influential Saudi Oil Minister Ali al-Naimi said in December that Riyadh was still committed to a $70-$80, a price high enough for producers to invest in new capacity but low enough to encourage world economic recovery.

Many in OPEC routinely blame speculators for rising prices but most analysts and industry figures say prices are increasing now because of a recovery in world fuel demand.

“The market is bullish because there is increasing demand in emerging markets,” Christophe De Margerie, the chief executive of French oil major Total said at an industry event in Abu Dhabi Sunday.

“The world economy is just recovering. It would have been better for the prices not to go too high too quickly.”

Oil hit a record $147 a barrel in 2008 and while analysts do not expect a repeat of that any time soon there are fears that if OPEC does not signal its intention to add supplies, prices could rise significantly above $100.

“We believe OPEC has an historic opportunity in 2011 to either show its might by keeping oil prices steady or instead to allow further price increases that could put the global economic recovery at risk,” said Sabine Schels, commodity strategist at Merrill Lynch Bank of America in London.

“We are more inclined to believe that Saudi Arabia will act responsibly and encourage OPEC members to increase output early this year.”