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RIYADH - Iranian President Mahmoud Ahmadinejad said yesterday that Opec's member countries have expressed interest in converting their cash reserves into a currency other than the depreciating US dollar, which he called a "worthless piece of paper".
His comments at the end of a rare Opec summit exposed fissures within the 13-member oil cartel - especially after US ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit's final declaration.
The hardline 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. He blamed US President George W. Bush's policies for the decline of the dollar and its negative effect on other countries.
"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 US dollar ... to form the basis of our oil trade."
Venezuelan President Hugo Chavez echoed this sentiment on 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 freefall without a parachute?"
He called 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.
Iran and Venezuela have proposed trading oil in a basket of currencies to replace the historic link to the dollar, but they had not been able to generate support from enough fellow Opec members - many of whom, including Saudi Arabia, are staunch US allies.
Both Iran and Venezuela have antagonistic relationships with the US, suggesting their proposals may have a political motivation as well. While Tehran has been in a standoff with Washington over its nuclear programme, left-wing Chavez is a bitter antagonist of Bush. US sanctions on Iran also have made it increasingly difficult for the country to do business in dollars.
During Chavez's opening address to the summit on Saturday, the Venezuelan leader said Opec should "assert itself as an active political agent". But King Abdullah appeared to distance himself from Chavez's comments, saying Opec always acted moderately and wisely.
A day earlier, Saudi Arabia opposed a move by Iran on Friday 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 did not specifically mention concern over the weak dollar, the organisation directed its finance ministers to study the issue.
Opec will "study ways and means of enhancing financial co-operation among Opec ... including proposals by some of the heads of state and governments in their statements to the summit", Opec Secretary-General Abdalla Salem el-Badri said, reading the statement.
Iran's Oil Minister went a step further and said Opec would form a committee to study the dollar's affect on oil prices and investigate the possibility of a currency basket.
"We have agreed to set up a committee consisting of oil and finance ministers from Opec countries to study the impact of the dollar on oil prices," Gholam Hussein Nozari said.
Iraqi Oil Minister Hussein al-Shahristani said the committee would "submit to Opec its recommendation on a basket of currencies that Opec members will deal with."
- AP
