When OPEC meets, whether the organization loves it or not, the fact remains politics gets involved in big way. Riyadh summit was no exception. Even before a word was uttered at the conference halls, even before the summit got under way, there were speculations all around about OPEC endeavoring to take a new shape and the new emerging OPEC — trying to play a more active, assertive role in the global political arena with push and pulls by various stakeholders.
There were calls from within, for the OPEC, the group controlling 40 percent of the global crude market, to use its position to influence changes in the direction the world was taking. Eyes were thus glued on Riyadh, to see what direction OPEC would takes hence. And thus when on day one, President Chavez, grabbed the headlines through his fiery, hard-hitting 25-minute speech, every one, including Custodian of the Two Holy Mosques King Abdullah, knew he “went on a bit.”
And finally when the King himself spoke on the occasion, he appeared crystal clear in his thinking process —oil is an economic tool and needed to be used that way. Oil “must not become an instrument for conflict,” he underlined in clear terms. The era of 70s was gone as far as OPEC was concerned — and for more than one reason.
In current times, it is the economic emancipation of the common people taking precedence in global politics. Oil producers cannot and should not be oblivious, one has to underline. However, there is a catch to it too!
President Chavez has a very strong point when he said oil prices could touch skies, if another war is initiated in the region. No one could deny that. Any war on Tehran would have real, serious implications for the entire global energy balance. This could be disastrous! President Ahmedinejad seems convinced of the fact.
The Iranian president, a nemesis to many in the West was gracious enough to concede, Iran would “never look to use oil as a weapon,” predicting “no war will break in the region, therefore you should not be worried.” Can we all be half as optimistic as Ahmedinejad is, despite all the pressures on him, one really can’t say for sure. For it seems while President Hugo Chavez and President Ahmedinejad could be reasoned, some people in Washington don’t seem to be ready to tune to any advice in this direction. And this is scary — to say the least.
And while the leader of the free world seems determined to put Kyoto behind and move on, leaders in Riyadh succeeded in garnering a healthy sum of $750 million to ensure a safe and healthy environment for the world we all live. The producers are ready to play responsible, though it seems remote if the leading consumer in the world too is ready to fulfill its obligation in that direction. One could only hope and perhaps pray!
The issue of delinking oil proceeds from the weakening dollar may not have been discussed, for obvious reasons in the final communiqué, yet the issue remained a point of concern to all. And the Concern was not limited to President Chavez or President Ahmeninejad only. Even President Rafael Correa of the just inducted Ecuador also openly favored pricing oil in a currency stronger than the dollar. The Iranian President was later quoted as saying the meeting had considered pricing oil in currencies other than the dollar and that they also “discussed converting their cash reserves away from the sliding US dollar.”
The issue is not that easy. If dollar collapses as a result of OPEC delinking, then it would also impact the trillions of dollars of OPEC money invested in dollars, one has to understand. Decisions thus have far-reaching economic and political consequences and could definitely not be taken at the spur of the moment, every one realized.
After all these years, it is apparent OPEC has matured. It realizes, like any other organization, it has its limits, too. It is all but unnatural thus to expect complete harmony and unanimity of views in its ranks on all issues. There are bound to be differences and shades of opinion.
In Riyadh too, similar was the case. In the conference rooms, there were thus all shades of opinion. But along with them, consultation, rather than confrontation, prevailed and consensus emerged. This is what diplomacy is all about. Statesmanship goes beyond rhetoric. Leadership requires one to think differently, in a more pragmatic manner. The leaders present in Riyadh earlier the week too, had a common streak too. They all had the prosperity of their own people foremost in their minds.