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Iran's leader calls dollar 'worthless'

OPEC members may convert cash reserves out of the declining U.S. currency, he says.

November 19, 2007|From the Associated Press

RIYADH, SAUDI ARABIA — Iranian President Mahmoud Ahmadinejad said Sunday that OPEC's members have expressed interest in converting their cash reserves into a currency other than the depreciating U.S. dollar, which he called a "worthless piece of paper."

His comments at the end of a rare summit of OPEC heads of state exposed fissures within the 13-member cartel -- especially after U.S. ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit's final declaration.

The run-up to the weekend meeting was dominated by speculation over whether the Organization of the Petroleum Exporting Countries would raise production after recent oil price increases that have pushed the value of a barrel almost to $100. But cartel officials have resisted pressure to increase oil production and said they will hold off any decision until the group meets next month at Abu Dhabi in the United Arab Emirates.

They have also cast doubt on the effect any output hike would have on oil prices, saying the recent rise has been driven by the falling dollar and financial speculation rather than any supply shortage.

The hard-line Iranian leader's comments also highlighted the growing challenge that Saudi Arabia, the world's largest oil producer, faces from Iran and its ally Venezuela within OPEC.

"They get our oil and give us a worthless piece of paper," Ahmadinejad told reporters after the close of the summit in the Saudi capital of Riyadh. He blamed President Bush's policies for the decline of the dollar and its negative effect on other countries.

Oil is priced in U.S. dollars on the world market, and the currency's depreciation has concerned oil producers because it has contributed to rising crude prices and eroded the value of their dollar reserves.

"All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency," Ahmadinejad said. "Some said producing countries should designate a single hard currency aside from the U.S. dollar . . . to form the basis of our oil trade."

Venezuelan President Hugo Chavez echoed this sentiment Sunday on the sidelines of the summit, saying, "The empire of the dollar has to end."

"Don't you see how the dollar has been in free-fall without a parachute?" Chavez said, calling the euro a better option.

Saudi Arabia's King Abdullah had tried to direct the focus of the summit toward studying the effect of the oil industry on the environment, but he continuously faced challenges from Ahmadinejad and Chavez.

On Friday, Saudi Arabia opposed a move by Iran to have OPEC include concerns over the falling dollar in the summit's closing statement. Saudi Arabia's foreign minister warned that even talking publicly about the currency's decline could further hurt its value.

But by Sunday, it appeared that Saudi Arabia had compromised. Though the final declaration delivered Sunday did not specifically mention concern over the weak dollar, the organization directed its finance ministers to study the issue.

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