Azerbaijan, Baku, Oct. 16 /Trend, T.Jafarov, E.Ostapenko/
Iran's election as OPEC president for the first time in more than last 30 years is a significant event, since Saudi Arabia and Kuwait have so far disagreed with the appointment of the Iranian representative as the head of the organization, a member of Trend Expert Council, a professor at Glasgow University Reza Taghizadeh told Trend via e-mail.
However, in his view, the head of OPEC has no role in the political line of the organization.
This week the regular meeting of OPEC has decided to transfer the presidency of the organization until January 2011 to Iran.
Oil Minister of the Islamic Republic Masud Mir-Kazemi was elected chairman of the Organization of Petroleum Exporting Countries at a one-day meeting in Vienna. Iran will chair the OPEC for the first time in last 36 years.
"I believe that this will not affect the change of oil prices. Because the head of OPEC does not set the oil price, which varies according to the situation in the market. A country such as Saudi Arabia could affect oil prices because it has great potential to develop and export oil. By increasing or decreasing production, Saudi Arabia regulates the market cost of oil," said Taghizadeh.
Over the past two years, OPEC has cut oil production by almost four million barrels, much of which accounted for Saudi Arabia (production decreased from 34 million bpd to 28 million bpd), Taghizadeh said. Moreover, Saudi Arabia attentively approaches increase or change in quotas, said Taghizadeh. The country considers acceptable the oil price at $80-100 per barrel, and that currently there is no potential to increase the cost of oil on the market, said the expert.
According to Taghizadeh, Iran's election the head of the cartel will not affect the relations between oil consumers and OPEC.
"The countries that are members of this organization have permanent markets in Europe and East Asia. On the other hand, the European market is saturated not only with oil delivered by the cartel participants, but also a substantial amount of oil is imported from Russia, Azerbaijan, Africa," said Taghizadeh.
"The presence in OPEC is very important for Iran because it is a large structure, which allows Iran to realize its economic interests. OPEC is important for Iran as a tribune to present its point of view. I think that Iran will use the OPEC for anti-Western propaganda," the director of the Russian Center for Public Policy Research Vladimir Yevseyev said in an e-mail.
According to him, Iran is interested in increasing oil prices.
"According to those estimates that I have, the export of Iranian oil to the individual states has been reduced. This also affects China - the main buyer of Iranian oil. China now reduces its purchase of Iranian oil," said Yevseyev.
According to him, Iran, for which the sale of oil is the basis of economy of this country, needs to find ways to sale this product. Upon some estimates, Iran gains about $60 billion from oil exports. It is very important to maintain stability in Iranian society.
Also, the chairmanship to the OPEC can be used as the pressure on West, which now does not feel a crucial need in the procurement of oil. If Iran succeeds to reduce production, it can be used as an element of pressure," said Yevseyev.
As head of OPEC, Iran will try to somehow counter the policy of the European Union, which maximally complicates delivery of oil to consumers. "I do not believe that it will be effective, but Iran must take such attempts, says Yevseyev.
According to experts, the provocative foreign policy of Iran has a negative impact on business, especially large European companies that are scaling down their presence in the Iranian market.
"First, the political risks are rising, which can lead to economic risks. Plus, the presence of sanctions. Yet I do not see the way how this situation could change, as I do not see grounds for a rapprochement between Iran and Europe, anyway, under the current leadership," said Yevseyev.
"Europe looks at Iran's presidency of OPEC as a problem with which it will fight, but not as the possibility of rapprochement with Iran," said the expert.
According to the analyst of the European Union Institute for Security Studies (EUISS) Rouzbeh Parsi, the Iranian presidency to OPEC would not affect oil prices.
"I do not think that oil prices will change only because Iran has become president of OPEC. Any significant or long-term changes depend on the more important indicators than on who is in charge of the organization," Parsi wrote in an e-mail to Trend.
According to him, in the oil cartel, Iran is well balanced with Saudi Arabia, which would not allow it to implement its policy towards the EU and other countries.
OPEC was founded in 1960 by Iran, Iraq, Saudi Arabia and Venezuela. Currently it unifies Algeria, Indonesia, Libya, UAE, Kuwait, Nigeria, Qatar. Since 2007, Ecuador once again became a member of OPEC. OPEC member countries account for about 35 percent of world oil exports.