Iran + Russia + Venezuela = Dissent at OPEC Summit

On November 18, 2007, Iranian President Mahmoud Ahmadinejad said members of the Organization of Petroleum Exporting Countries (OPEC) have expressed interest in converting their cash reserves into a currency other than the rapidly depreciating U.S. dollar.

The meeting was held in the Saudi capital Riyadh, with heads of states and delegates from 13 of the world's biggest oil-producing nations, was the third full OPEC summit since the organization was created in 1960.

Ahmadinejad's comments at the rare OPEC summit meeting also highlighted the growing challenge that Saudi Arabia, the world's largest oil producer, faces from Iran and its ally Venezuela within OPEC.

Oil is priced in U.S. dollars on the world market, and the currency's depreciation is a significant source of concern to oil produces as it has played a role in the increase in crude prices and the decrease in the value of their dollar reserves.

Saudi Arabia's King Abdullah had tried make the environmental impact of the oil industry on the environment the topic of the summit, but faced continual interference from both Iran and Venezuela.

Iran and Venezuela proposed trading oil in a basket of currencies to replace the historic link to the dollar, but they had not been able to generate support from enough fellow OPEC members. Many OPEC members, such as Saudi Arabia, are U.S. allies.

Both Iran and Venezuela are currently at odds with the U.S., and their proposal may have political, as well as economic motivations. Iran is in a dispute with Washington over its nuclear program, and Venezuela’s President Hugo Chavez is an open critic of U.S. President George Bush. U.S. sanctions on Iran have made it increasingly difficult, if not impossible, for the country to do business in dollars.

A day earlier, Saudi Arabia opposed a move by Iran on Friday to have OPEC include concerns over the falling dollar included in the summit's closing statement after the weekend meeting. Saudi Arabia's foreign minister even warned that even talking publicly about the currency's decline could further hurt its value. But by Sunday, it appeared that Saudi Arabia had compromised.

Though the final declaration delivered Sunday did not specifically mention concern over the weak dollar, the organization directed its finance ministers to study the issue. Iran went a step further and said OPEC will form a committee to study the dollar's impact on oil prices and investigate the ramifications of a currency basket.

Algeria's Oil Minister, Chakib Khelil, said he would urge Russia, the second-biggest oil supplier, to join OPEC when he became president of the organization.

Russia attends OPEC meetings as an observer nation.

Khelil will become OPEC president on January 1, 2008.