Behind The Curtain

"Pay no attention to the man behind the curtain," roared the Wizard of Oz.

Such it would be with OPEC, if you believed them. The curtain was drawn aside this past week and its inner workings were embarrassingly revealed:

OPEC heads of state converged on Riyadh for a rare summit opening Saturday with the organisation divided over the falling US dollar and attempts to give a political impetus to the oil-exporting cartel.

In a gaffe late Friday, a private meeting of ministers from the 12 members of the cartel was mistakenly broadcast to journalists, revealing a spat between Saudi
Arabia and anti-US members Iran and Venezuela about the waning US currency.

Journalists witnessed Iran request that the final declaration to be issued by OPEC leaders at the end of the summit on Sunday express the concern of member states about the falling US currency and its impact on oil revenues.

Reacting to the proposal, which was backed by Venezuela, Saudi Foreign Minister Prince Saud al-Faisal warned against mentioning the US currency.

"There are media people outside waiting to catch this point and they will add to it (exaggerate) and we may find that the dollar collapses," Prince Saud said.

Venezuelan President Hugo Chavez, who arrives later Saturday, has also called on OPEC to take on a stronger "political and geopolitical" role and return to its stance of the 1970s when it tightened the screws on consumer nations.

Saudi Arabia appeared to have prevailed in the debate about the dollar and the issue is not expected to be mentioned, but the incident highlights sharp differences at the heart of the group.

"It's the second meeting when OPEC is showing its dissension and there are clear divisions and fissures emerging," said Yasser Elguindi, a manager at oil brokerage SIG, referring to discord about output at a meeting in September.

"It's a gaffe. Nobody likes to air their dirty laundry in public," he said.

The remarkable insight into the inner workings of the Organisation of Petroleum Exporting Countries on Friday, which produces 40 percent of world oil, ended when a furious official emerged to switch off the television.

The fall of the dollar, which has declined by about 15 percent in 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency.

This OPEC meeting comes at a time of concerted stress on global oil markets, with the OPEC cartel under pressure from many sides (foremost by the US) to increase its output to help calm record crude prices that threatened to breach $100 dollars a barrel for the first time last week.

And Saudi Arabia cannot afford to be privately or publicly seen to support America, trust me.

If we didn't "get it" then, we should "get it" now: Iran and Venezuela are our enemies. And Saudi Arabia took an actual bit of a stand for the US. But make no mistake: Chavez and Ahmadinejad will do all they can to see us burn.

BZ