Tim Webb in Riyadh - The Observer
November 18, 2007
'Kill the cable, kill the cable,' shouted the security guard
as he burst through the double doors into the media room
at the Intercontinental Hotel in Riyadh, followed by Saudi
police. It was too late.
A private meeting of Opec leaders, gathered this weekend in
Riyadh for the cartel's third meeting in its 47-year history,
had just been broadcast to the world's media for more than
half an hour after a technician had mistakenly plugged the
TV feed into the wrong socket. The facade of unity that the
cartel so carefully cultivates to a world spooked by soaring
oil prices was shattered.
Sometimes, such innocent mistakes can have far-reaching economic
and political consequences. Commodity and currency traders
said this weekend that oil prices would surge again tomorrow
- possibly breaking the $101 per barrel record set in the late
1970s - while the already battered dollar would fall further
on the back of the unintentional broadcast.
On Friday night, during what the participants thought were
private talks, Venezuela's oil minister Venezuela Rafael Ramirez
and his Iranian counterpart Gholamhossein Nozari, argued that
pricing - and selling - oil using the crippled dollar was damaging
the cartel.
They said Opec should formally express its concern about the
weakness of the dollar when the cartel makes its official declaration
at the close of the summit today. But the Saudis, the world's
largest oil producers and de facto head of Opec, vetoed the
proposal. Saud al-Faisal, the Saudi foreign minister, warned
that even the mere mention to journalists of the fact that
leaders were discussing the weak dollar would cause the US
currency to plummet.
Unfortunately his words and those of everyone at the meeting
were being broadcast via a live television feed to a group
of astonished reporters. 'I couldn't believe it,' said one
who was there. 'When I realised they didn't know they were
being broadcast live, I frantically started taking notes.'
Opec only realised that the leaders' row was being broadcast
to the world when the Reuters news agency put out a report
of the argument.
The weakness of the dollar is one reason why oil prices are
so high, as cartel members seek to compensate for their lower
earnings. This means a further drop in the dollar is likely
to be accompanied by a rise in oil prices.
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