Iran’s Ahmadinejad calls for higher crude prices - Emirates24|7

Iran’s Ahmadinejad calls for higher crude prices

Iran’s hard-line President Mahmoud Ahmadinejad was quoted on Saturday as saying crude oil prices at $115 (Dh423) a barrel are too low, and that oil must “discover its real value.”

Oil prices have hit all-time highs above $115 a barrel in recent weeks, amid reports that oil and gasoline stocks in the United States were lower than expected and as the dollar sinks to record lows.

“The oil price of $115 a barrel in today’s global markets is a deceiving figure. Oil is a strategic commodity that needs to discover its real value,” the website of Iran’s state-run television quoted Ahmadinejad as saying.

The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday.

Crude oil futures surged to a new trading record of $117 (Dh430.56) a barrel on Friday following an attack on a key pipeline in Nigeria. The rise capped a week of record highs fueled by supply woes and the dollar’s weakness relative to other major currencies.

Ahmadinejad said despite the surge in oil prices, the economic value of crude oil is currently less than what it was in 1980.

“While the price of other commodities have increased, the economic value of the current oil price is even less than 1980,” he said.

Ahmadinejad accused Western industrialised nations of “selfishness” in their quest for cheaper oil.

“When they get hold of oil, they assume that oil is a free commodity and belongs to them and has wrongly been placed in other territories... This is the spirit of selfishness and arrogance,” Ahmadinejad was quoted as saying.

A host of supply and demand concerns in the US and abroad, along with the dollar’s weakness, have bolstered oil prices, even as record retail gasoline prices in the US appear to be dampening demand.

A stronger dollar makes commodities such as oil less attractive to investors as a hedge against inflation, and it makes oil more expensive to investors overseas. Analysts believe the weaker dollar is the primary reason oil has soared well past $100 a barrel this year. But the effect tends to reverse when the greenback gains ground.

Ahmadinejad called the US currency “a handful of paper” without any global support.

Iran has stopped using the US dollar in its oil transactions with the outside world, switching to other non-dollar currencies such as Euro.

“The dollar is not money any longer but a handful of paper distributed in the world without commodity support,” the website quoted Ahmadinejad as saying. (AP)