RIYADH (Reuters) – OPEC will exclude any reference to the weak dollar in its draft summit communique, voting down a proposal by Venezuela and Iran to highlight the currency’s negative impact on producers’ economies.
Saudi Arabia had objected to the bid on Friday, saying the mere mention of the dollar could exacerbate its weakness.
“I am telling you, you will not see it in the final declaration,” OPEC’s Secretary-General Abdullah al-Badri said after a meeting of oil, finance and foreign ministers was briefly broadcast live to journalists.
“Yes, we are concerned. But this is a discussion among ourselves and this is not the first time we have discussed it,” Badri said.
The dollar’s drop against major currencies helped fuel oil’s rally to a record $98.62 last week. It has also reduced the purchasing power of the Organization of the Petroleum Exporting Countries.
But top oil exporter and summit host Saudi Arabia said the dollar was an issue best left alone by OPEC.
“I think we should leave this matter to the competent parties… and not include it in the communique’s draft,” said Saudi Foreign Minister Saud al-Faisal.
“My fear is that any mention that OPEC makes of studying the issue of the dollar, will in itself have an impact.”
The draft document will be submitted to OPEC’s heads of state for approval at the weekend. Its central themes are the environment, oil supply and energy’s role in developing poor countries, said Ecuador’s Oil Minister Galo Chiriboga.
OPEC’s second-biggest producer Iran has caused flutters in financial markets by shifting much of the payment received for its oil to non-U.S. currencies.
But other major producers have yet to follow Iran’s move to protect its export revenues by cutting exposure to the dollar.
Venezuela, however, is more worried about the impact on its export revenues by a decline in the dollar than any economic slowdown in the United States, its biggest crude customer.
“The Iranian and Venezuelan proposal is to raise attention to the weakening of the U.S. dollar in the final communique,” said Iran’s Foreign Minister Manouchehr Mottaki.
But Riyadh, a U.S. ally, objected saying mentioning the issue would only make matters worse.
The ministers also discussed whether they should instruct OPEC’s finance ministers to study ways to protect the purchasing power of their economies given the dollar’s fall to record lows.
“Just indicating that we have charged finance ministers with studying this issue … would mean a decision taken by OPEC would have the opposite effect and the media would pick up on this point,” said the Saudi foreign minister.
“And then perhaps we would find that the dollar had collapsed, instead of us having done something in the interest of our countries.”