NORDLAND: Will OPEC really increase crude-oil production by 800,000 barrels per day, or will members simply use that to legitimize past cheating on their quotas? SHEIK SAUD: It was our responsibility to fulfill our commitment to increase by 500,000 barrels and we added 300,000 more. But your question is very valid. Some countries have been overproducing; I can’t really deny this fact. We have increased production [in Kuwait] for several reasons; one is a technical reason, [the other was] to prevent any possible recession in the world market… We have vested interests in the U.S. economy, in the European economies. If there is a recession in the U.S. or Europe, it would have an impact on our economy.
Some commentators have predicted that prices would rise to $40 per barrel, or even much higher. What do you think? The question is, what is a fair price for a barrel of oil? There are very different voices even in OPEC, because we have different needs. There are less than a million Kuwaitis and a very high budget. Iran is 60 or 70 million people… There are exporters who would like to see $50 a barrel. So we’re trying to come to some kind of consensus. Now we’re talking about an average of $25 a barrel.
Do OPEC members see high prices now as making up the shortfalls caused when oil was only $10 a barrel two years ago? I had a 50 percent deficit in my budget in 1998. That’s major. We’re not asking for major surpluses or windfall profits, we’re just asking to balance our budget. Is that too much to ask for? Let’s stop accusing each other. Consuming countries accuse OPEC for high oil prices, while OPEC talks about the high taxes in those countries.
The protesters in Europe so far blame taxes, rather than OPEC. Consumers complaining–we don’t want to see that. Now they’re blaming governments but [soon] they’ll start again blaming OPEC. We’re always the very easiest scapegoat. I mean, I didn’t hear any complaints when the price of oil was $8 or $10 a barrel.
How worried are you by this crisis? I’ll be more comfortable when there’s a price that will satisfy our economic needs, and also will be acceptable to our immediate customers.
Is there a real oil shortage underlying this crisis? There is no shortage of crude in the world market. The issue is the refineries, which are not supplying the markets with what they need. The refineries claim they are operating at 100 percent, but I don’t think so. Because as oil prices rise, refineries usually reduce their capacity–the economics don’t make sense for them.
Would you like to see governments reduce the high taxes on gasoline at the pumps? It’s a very sensitive question politically [that] I don’t want to get involved in. But when taxes are 70 percent of the price, you have to think, “Are these fair?” I think it’s rather on the high side. I wish they would rationalize these taxes.
