Tag Archives: OPEC

Brazil Knocking On Door Of OPEC

Brazilian President Luis Ignacio Lula de Silva believes it is time for OPEC to recognize the emerging oil impact of his nation and make it a member of the oil producing nations’ club. In 2007, a uage oil reserve was disccovered off the coast of Brazil’s Rio de Janeiro area. The find could well catapult Brazil’s oil reserve by about 40% which should make Brazil an emerging economic powerhourse. Lula wants to combine the enormous work his nation has done in ethanol production with the new oil reserves to prove Brazil is no longer a third world nation, but an important figure in modern oil production. His goal is that by 2025, ethanol will handle all internal needs of the nation for oil which leaves the newly discovered oil to be sold abroad.

Lula, in an interview with Der Spiegel, argues Europe should not get involved in ethanol production but leave that aspect of energy to Latin American and Africa. “Our production costs are unbeatable,” he argues, and it is time for Europe and American to accept the role Brazil can play in the energy crisis facing the world.

Brazil brings to oil the presence of a stable government run on democratic princples and willing to cooperate with the world.

Euro Soars In Value-Dollar Goes Down!

OPEC’s Secretary-General, Abdullah al-Badri, told the Middle East Economic Digest, there is a strong possibility the price of oil will switch from being pegged with dollars to the euro being the hallmark of how oil prices are determined. “Maybe we can price the oil in the euro. It can be done, but it will take time.” He admitted OPEC was under great pressure from nations like Venezuela to make the switch since the decline of the dollar is impacting their wealth. “In oil exchanges in New York, Singapore or Dubai, you can see the currency is the euro or the yen,” he said.

It took two world wars and about fifty years to enshrine the dollar as the method of pricing the price of oil. The value of the dollar has declined 44% against the euro within a decade, and this concerns oil producers. They hesitate at this point to make switch due to fear a drop in the price of the dollar would impact their trillions invested in the United States.

George Bush ran his campaigns claiming Republicans were the party fo fiscal responsibility. It is during his watch that the dollar has declined so precipitously. So much for another Bush claim to fame.

US Attack On Iran– Possible Oil Retaliation?

President Mahmoud Ahmadinejad of Iran said he had no intention of using oil as a weapon in his conflict with the United States, but if President Bush authorizes an attack on his nation, we “know how to react.” He claimed, “We would never want to use oil as a weapon or to take any illegal actions… but if American takes any action against us, we will know how to reply.” His comments came at the conclusion of an OPEC meeting at which Iran’s leader raised the issue of whether or not it was time to cease linking the price of oil to the American dollar. There are fears due to ambiguous comments from the Bush administration that the United States might take some offensive action against Iran which would probably result into an oil embargo or blocking of oil shipping channels. Ahmadinejad was hopeful and said, “my prediction is that no war will break out in the region.”

As a result of pressure from Venezuela and Iran, OPEC will examine its historic policy of linking oil prices to the American dollar. There is some feeling of pricing oil based on the euro. The fall of the American dollar has impacted oil producing nations because their price is based on the worth of the US dollar.

Iran Threatens US Dollar At Closed OPEC Meeting

The the Organization of Petroleum Exporting Countries(OPEC), Iran’s Foreign Minister Manoucher Mottaki, was accidentally overheard telling the members it was time to end linking the price of oil to the American dollar because of the continual depreciation of that currency. “The reality is we have this problem. I think we should draft the declaration to reflect our concerns.” Foreign Minister Saud al-Faisal of Saudi Arabia responded that such a declaration would hurt the price of oil. “Nobody wants to have less money than more money. I am sure we all agree on that.” It also came out, President Chavez of Venezuela, wants to cut the price of oil being sold to poor nations while keeping it high on the wealthy ones. OPEC leaders want to make certain Chavez is kept away from the media

The United States of America’s refusal to become energy smart is resulting in other nations treating it as energy dumb. It is now almost forty years since OPEC became a force in the world but America still refuses to make dramatic steps to end dependency on oil and, as a result, increasingly has other nations making decisions about what happens in the United States of America.