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Venezuelan Oil Minister: $100 Fair Price for Oil Barrel

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Rafael Ramirez, the president of Venezuela’s state-run oil company, Petroleos de Venezuela (PDVSA), announced last week his belief that the price of oil should be at $100 dollars per barrel.

“An oil barrel at $100 is fair because it would allow for just compensation of our natural resource and provide payment for the significant investment that producing countries make to keep up our production capacities,” said the minister.

After a conference held in Caracas celebrating the 50th anniversary of the Organization of Petroleum Exporting Countries (OPEC) last week, Ramirez explained the necessity to cautiously evaluate factors in the world’s oil market before fixing a price within the organization.

“We know oil prices are being affected by elements that do not necessarily belong to the oil market; that is to say, financial speculation, the weakness of the dollar - all these elements are closely linked to the perception of economic problems, most of all in the US economy and the Eurozone. Therefore, we take into account these factors before making a decision,” he said.

The Venezuelan Oil Minister affirmed that oil prices have been recovering after a collapse. Today, “we have a floor in oil prices around $70 per barrel,” he said.

He recalled that in 2008, OPEC’s oil barrel reached $140 and then fell suddenly to $35 dollars at the beginning of 2009.

Ramirez underscored the decision made by OPEC to cut production until a balance was reached in the market. “OPEC made a very important decision in December 2008 by cutting 4.5 million barrels of its production. This made the recovery of oil prices possible,” commented Ramirez.

OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Today, its 12 members also include Algeria, Angola, Ecuador, Libya, Nigeria, Qatar and the United Arab Emirates.

The arrival of the Bolivarian Revolution, and along with it, a new vision of Venezuela’s oil policies, allowed for the redesigning of the OPEC’s objectives to strengthen inter-continental integration.

The president of the Permanent Committee on Economic Development of Venezuela’s National Assembly, Mario Isea, explained on Tuesday that Venezuelan oil policies have enabled OPEC to guarantee energy resources to the world population.

“Under the leadership of President Chavez, the Organization is now talking about integration, cooperation, and using energy as a tool to create a new method of interaction between countries, exchanging energy for commerce and technology,” he explained.

Venezuelan economic policies were responsible for regaining confidence in OPEC and for restoring the organization, enabling it to guarantee hydrocarbon security worldwide, stated Isea.

“Venezuela’s actions returned confidence to OPEC’s members,” he added, referring to “fulfilling production cuts with discipline, increasing the range of oil prices, and restoring internal relations that were debilitated due to anti-OPEC actions of international capitalism.”

In September 2000, Caracas hosted OPEC’s World Summit during its 40th anniversary, during which President Chavez proposed the installation of a mechanism to adjust oil prices. All member countries accepted, oil prices rose substantially, and the measure allowed for stabilization in the hydrocarbons market.

Published on Sep 20th 2010 at 2.23pm