Friday, April 21, 2006

Ahmadinejad Hails Rising Oil Prices as 'Very Good'

Iran’s president said on Friday the rise in oil price was “very good,” Iran’s Mehr News Agency reported, emphasizing the hawkish position of the world’s fourth largest oil exporter as crude prices have hit record levels.

The increase of the oil price and growth of oil income is very good and we hope that the oil prices reach their real levels,” Mahmoud Ahmadinejad said as he toured an oil exhibition in Tehran, the agency reported.

He did not say what those real levels should be. But these and other earlier remarks suggest he believes crude prices should rise above this week’s record high of over $74 a barrel. On Friday, European Brent crude fell below $73.

Iranian Oil Minister Kazem Vaziri-Hamaneh said on Thursday Iran was happy with surging prices. The minister blamed the price rise on a shortage of gasoline in the United States and not a shortage of crude in world markets.

Most members of the Organization of the Petroleum Exporting Countries worry that the high prices will hurt world economic growth and Iran had previously shared that view.

OPEC member Venezuela has also taken a hawkish position.

In earlier comments to reporters at the exhibition, Ahmadinejad said Iran was looking at ways to help protect poor states from the impact of rising prices but said rich countries should pay what he called the “real price.”

Iranian lawmakers have previously said that a price of $100 or more for a barrel of oil was an appropriate level. READ MORE

“There is a fund in OPEC, and the Oil Ministry and Foreign Ministry are in talks to see whether this OPEC fund has the capacity [to support poor countries],” Ahmadinejad said when asked about his plans to set up an assistance fund.

“But those rich and industrial countries that have billions of dollars in income should pay the real price for their crude oil,” he said.

He did not give details about the financing mechanism, but the Organization of the Petroleum Exporting Countries has a fund to promote development.

In March, OPEC production excluding Iraq was 27.81 million barrels per day, of which Iran’s production was 3.85 million bpd.