The OPEC oil ministers will hold their meeting tonight (Wednesday) in Vienna, two weeks before the G20 Summit in Pittsburgh that will witness the participation of two major oil-producing countries: Saudi Arabia and Russia. French President Nicolas Sarkozy had said in the speech he addressed at the annual French Ambassadors' conference that he agreed with British Prime Minister Gordon Brown on launching a dialogue that would begin in Pittsburgh between consumers and producers in order to set a desired goal for oil prices that would neither be too high nor too low. Sarkozy declared: “The presence of Saudi Arabia and Russia at the G20 Summit will be an occasion for launching such a dialogue, as extremely high oil prices are harmful to the global economy. Also, greatly reduced oil prices damages the future of investments in the energy field and the constant availability of oil for meeting the ever-increasing demand.” This is the new discourse of consuming countries that want to dialogue over the price of oil ever since the price of the oil barrel exceeded USD140. Since the beginning of the 1980s, there has been mention of a dialogue between consumers and producers, but it was restricted to talk that did not tackle oil prices as the consuming countries refused to do so. However, when the G20 energy summit was recently held, the chairman of the Italian oil company said that the price of an oil barrel should range between USD60 and USD80. He considered that the oil price must not be too high so that it wouldn't negatively affect the global economy nor too low so as not to prevent investments in oil-producing countries on the long run. British Prime Minister Gordon Brown had called the OPEC countries to hold a dialogue in London around six months ago. This led to nothing new except for the fact that oil-producing countries were asking oil-consuming countries for a transparency regarding their demand expectations in view of production stability. Hence, it remained a dialogue of the deaf. The request of oil-consuming countries like France and Italy for a dialogue on prices is a novel thing. However, according to former Algerian Oil Minister Noureddine Ayit Hussein, the International Energy Agency – which is chaired by (Japanese) Tanaka – never gave its opinion regarding oil prices, since as a US administration it considers that the oil market determines oil price levels. There is no doubt that everyone wants to avoid oil price fluctuations and a political crisis, and this entails holding a dialogue on oil price levels that set a high and low ceiling. Large consuming countries such as the United States and Britain will not approve such a dialogue. In fact, the stability of markets since around ten years, especially in the past years, is due to the awareness of OPEC – and especially Saudi Arabia, which is the greatest oil-producing member – of its responsibility in facing a great rise or decrease in oil prices. When the oil price hit USD140 per barrel, the markets were saturated with oil, and speculation and dealing with and investing in hedge funds is what made prices rise. When the global financial crisis hit, the oil price decreased to USD30 a barrel, and OPEC and Saudi Arabia showed great responsibility in protecting prices. Saudi Arabia decreased its production by a million and a half barrels a day in view of protecting a price that remained at acceptable levels in light of a deteriorating global economy. The price of oil now fluctuates between USD60 and USD70 a barrel, i.e. less than the desired level mentioned by King Abdullah bin Abdulaziz, but close to it at a time when global economy still suffers from stagnation. Upon his arrival to Vienna yesterday, Saudi Oil Minister Ali Naimi described the oil market as stable and that the price level is satisfactory. It is why OPEC will not take any new measures during its meeting today. As for launching a dialogue in Pittsburgh on oil prices, there are great doubts among oil-producing countries on such a suggestion because the United States will not approve on a dialogue on acceptable price levels. Hence, the OPEC countries will be the only ones that will be responsible for the market stability even if there are price-affecting speculations at times that cannot be controlled.
