November 20, 2007 -

Despite having failed to persuade OPEC heads of state to mention the weak US dollar in their summit declaration, Iran and Venezuela continued last weekend to push for a move to a stronger currency for oil sales.

The November 18 declaration-signed by all 13 heads of state including Iran's Mahmoud Ahmadinejad, Venezuela's Hugo Chavez and just-rejoined Ecuador's Rafael Correa- steered clear of any mention of the weakness of the dollar, which is used for almost all international oil trade.

Iran and Venezuela had wanted the issue to be highlighted officially-a development inadvertently broadcast to the press room from a pre-summit meeting of oil, foreign and finance ministers November 16. But Saudi Foreign Minister Prince Saud al- Faisal and OPEC Secretary General Abdalla el- Badri had insisted the declaration would contain no such reference.

Venezuelan President Hugo Chavez told reporters as the summit ended that heads of state had agreed their ministers would study the issue, and that everyone should be concerned by the weakness of the US currency.

"Everyone should be worried, when [the US dollar] falls it will shake the world," Chavez said. "We will free ourselves from the empire of the dollar."

Iranian President Mahmoud Ahmadinejad told a post-summit press conference some member countries had proposed producers "designate a single hard currency, aside from the US dollar, to serve as the basis for our oil trade." He said the meeting had decided to direct ministers to discuss this.

All the leaders, he said, were interested in changing hard currency reserves to a "good hard currency" and establishing a bank that would help producers. "If this comes about, it will benefit everyone," he said.

The 13 heads of state and government, meeting less than two weeks after oil prices hit record highs of close to $100/barrel, ended their summit with a pledge to ensure adequate and stable supply of oil to world markets and to invest to help meet future demand.

The new investment will go not only toward upstream capacity, but also further downstream, where shortages of refining capacity over the past two years have been cited as a factor behind current high oil prices.

The OPEC leaders, whose countries account for around 40% of the world's current oil supply, vowed to "undertake the necessary investments to increase upstream and downstream capacities in our member countries, and, at the same time, urge consuming nations to provide the environment conducive to petroleum investments in their countries," the declaration said.

The declaration reaffirmed the group's commitment to "continue providing adequate, timely, efficient, economic and reliable petroleum supplies to world markets." It made no reference to any desirable price level or views on current prices, saying only that the group would "work with all parties to achieve balanced energy markets and stable and competitive petroleum prices."