Monday, 07 July 2008

Top Iranian’s Explanation for High Oil Prices

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AhmadinejadIf even a stopped clock can tell the right time twice a day, Iranian President Mahmoud Ahmadinejad, the leader of the world’s fourth-largest oil exporter, just might have given the world a rational partial explanation for high oil prices recently. Speaking at a June 17 OPEC meeting held in the Iranian city of Isfahan, Ahmadinejad charged: “Certain hands, for political and economic ends, are controlling the price in an artificial manner.”

In a televised speech, Ahmadinejad also said: “At a time when the growth of consumption is lower than the growth of production and the market is full of oil, prices are rising and this trend is completely fake and imposed.”

Ahmadinejad said that the fall in the value of the dollar has affected “the world economy and in particular the economy of world energy exporters.” He also stated: “The ever-increasing decrease in the dollar’s value is one of the world’s major problems.”

It is hardly disputable that the shrinking value of the U.S. dollar is a problem, and that this problem is reflected in the price of oil when measured in dollars. But Ahmadinejad’s solution is something else entirely: “I repeat my suggestion made six months ago at the OPEC summit in Riyadh to create a basket of credible currencies which would be the basis for oil transactions. Or alternatively, that OPEC countries create a new currency for their transactions.”

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