The oil market is plentifully supplied and soaring crude prices are “fake and imposed.” So said Iran’s President Mahmoud Ahmadinejad as he opened a meeting of the OPEC Fund for International Development in Iran.
He blamed the weak US dollar and claimed it was being pushed down on purpose for political and economic reasons. In a tirade against the United States and other Western powers, Ahmadinejad said: “At a time when consumption growth is lower than production growth and the market is full of oil, prices are rising and this trend is completely fake and imposed.”
Iran has opposed the Organisation of the Petroleum Exporting Countries boosting its output, but that is happening. OPEC pumped 35.9 million barrels in 2007, but in the first five months of this year has already produced 32.3 million.
The cartel’s biggest producer, Saudi Arabia, which will raise its output by half a million barrels a day next month, has called a meeting for next week in Jeddah to discuss oil prices. Taking part will be major oil producers, including non OPEC members as well as consumers.
Oil prices were lower on Tuesday, but remain volatile having touched a record near $140 a barrel on Monday.