Abdullah Bin Hamad Al-Attiyah, president of the Organization of Petroleum Exporting Countries and Qatar minister of energy and industry, told a near-capacity audience in Love Auditorium Monday night that OPEC is not to blame for the current high price of oil, but instead seeks reasonable prices for the common good.
"OPEC is not seeking the highest price, as the highest price is not in anybody's best interest," Al-Attiyah said, citing stable oil prices as a key part of OPEC's goal of sustainable economic development. "We have taken into account the interests of consumer nations."
Al-Attiyah emphasized that OPEC does not set prices unilaterally, as its member countries only produce 33 percent of total oil exports.
"OPEC has only limited capacity to reduce the high price of oil," Al-Attiyah said. "OPEC cannot say, 'Oh, I will set my oil [at] $25.' We say it's market-driven."
He described that when prices dropped to $7 per barrel in 1999, representatives from oil-consuming and oil-producing countries met in Cape Town, South Africa to discuss the low prices, and many said that OPEC should take a hands-off approach and let the market run its course.
Later, when the price rose to $30, Al-Attiyah found himself defending OPEC's deference to market forces to the same people who had previously complained. His response was one of bemusement: "But you told me in Cape Town not to interfere!"
He said despite perceptions to the contrary, OPEC was not pocketing "vast profits" from the sale of oil. Over the last five years, he said, the Group of Seven-industrialized countries including the United States-had made $1.3 trillion in "pure profit" from taxing oil imports, compared to $850 billion in profits for countries affiliated with OPEC. Furthermore, some of the latter sum went toward offsetting the costs of production.
Regarding the current war in Iraq, Al-Attiyah said wartime uncertainty has had a "major impact" on the short-term volatility of the oil market.
A student asked him about a scenario posed by former Saudi Minister of Oil Ahmed Zaki Yamani that suggested a post-war Iraqi government would increase the production of oil fourfold, causing other producer countries to follow suit and leading to the eventual demise of OPEC within 10 years.
Al-Attiyah dismissed this idea, saying that Yamani also claimed the price of oil would reach $100 per barrel in the event of a U.S.-led war in Iraq. In fact, crude oil prices have made it to just $30 per barrel.
Those who attended the presentation expressed largely favorable impressions, though at just under 30 minutes, some saw it as rather short. Freshman Yazan Kopty wished Al-Attiyah had addressed the war in Iraq in greater detail.
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