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OPEC Ministers Quarrel Over Pricing Oil in Dollars

By Steven Mufson
Washington Post Staff Writer
Saturday, November 17, 2007

RIYADH, Saudi Arabia, Nov. 16 -- A dispute among OPEC ministers during a closed-door session Friday spilled into the open when a camera was inadvertently left on, broadcasting into the nearby press room a quarrel over whether to stop pricing crude oil in dollars.

According to reporters who watched the broadcast for half an hour before Saudi officials pulled the plug, Iranian Foreign Minister Manouchehr Mottaki urged the group to price oil in another currency or a basket of currencies, a perennial issue that has drawn greater attention recently because of the sinking value of the dollar.

"We're backing this Iranian proposal," Venezuelan Energy Minister Rafael Ramirez said in Spanish, according to Bloomberg News.

But Saudi Foreign Minister Saud al-Faisal rejected the idea, suggesting that the group refer the question to the finance ministers from member countries of the Organization of the Petroleum Exporting Countries. But he said the group should not announce that its finance ministers would look at the issue because that might drive the dollar down even further.

"There will be journalists who will seize on this point, and we don't want the dollar to collapse instead of doing something good for OPEC," Faisal told the ministers.

The weak dollar has hurt oil exporters who use oil revenue to buy goods priced in euros or yen. That has added inflation pressures in oil exporting countries. On the other hand, many wealthy exporters, including Saudi Arabia, hold huge dollar-denominated assets.

The United States has imposed sanctions on Iran's biggest banks and pressured other banks to stop dealing with Iran. Tehran is already selling oil in euros and yen, but those transactions mostly translate the current dollar price, oil traders said.

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