Saudi Arabia Sees No Oil Shortage

Dec. 13, 2003

Saudi Arabia, the world's biggest oil exporter, said on Saturday it would not consider selling oil in euros instead of dollars despite a weakened U.S. currency.

CAIRO (Reuters) - Saudi Arabia, the world's biggest oil exporter, said on Saturday it would not consider selling oil in euros instead of dollars despite a weakened U.S. currency.

Saudi Oil Minister Ali al-Naimi also said he was concerned about a surge in oil prices, which has sent U.S. crude to around $33 a barrel, but added the rise was not due to a shortage of supply but rather issues such as the weather and speculators.

When asked if Saudi Arabia would consider selling oil in euros instead of dollars, Naimi, who was in Cairo for a meeting of ministers from Arab oil exporting nations, said: "No." "Nobody is talking about the euro... As far as I know I have never said anything about the euro," Naimi said, adding that OPEC would not discuss the issue of switching sales to the European currency when the cartel meets on February 10.

Outgoing secretary-general of the Organization of Petroleum Exporting Countries, Alvaro Silva, had earlier said producers might debate such a move to counter the dollar's decline.

But Naimi's view on the euro was echoed by other Arab OPEC ministers meeting in Cairo.

OPEC President Abdullah al-Attiyah of Qatar earlier dismissed the idea saying OPEC could not afford to make the move only to find the currency market favoring the dollar again.

Any such change would be a major shift in the balance of currencies behind the world's most valuable commodity market and would deal a heavy blow to the hegemony of the U.S. dollar in international trade.

World crude prices rose after OPEC ministers meeting in Vienna this month said they were targeting a higher price to offset purchasing power lost to the dollar's dive. OPEC agreed to keep a tight rein on oil supplies.

"Sell in euros? No, why should I sell in euros? I sell in dollars," Algerian Oil Minister Chakib Khelil said.

DOLLAR REVENUES

Gulf and other Arab producers, many of which depend on oil earnings, have gained extra dollar revenues from surging prices, but some benefits have been eroded by the slide in the dollar that makes goods from Europe and Japan more expensive.

"What we gain in terms of oil prices, we lost in terms of currencies," UAE Oil Minister Obaid bin Saif al-Nasseri said.

Asked about the current level of oil prices, he said: "It is on the high side, but not too high bearing in mind the recent decline in U.S. dollar."

The Arab OPEC ministers meeting in Cairo said prices were not rising due to supply shortages.

"Everybody is concerned about prices. We want a stable oil price as much as we can. How much control do we have over it? Some, we don't have complete control," Naimi said.

"It has nothing to do with supply shortages or anything like that," the Saudi minister said, adding that factors such as weather, rising gas prices and speculation were to blame.

Naimi said it was too early to talk of OPEC output cuts, saying: "We are in December. When we meet in February, we will look at all the information available and decide, either this or that. There is no reason to say now we are considering a cut."

Other Arab OPEC ministers made similar comments.

The ministers were at a meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC), a group that includes Arab OPEC and non-OPEC states but has no power to set policy.

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