By NNN-Bernama,
Kuala Lumpur : Iranian President Mahmoud Ahmadinejad has put the blame on “self-serving parties” for the steep rise in crude oil prices, saying the prices are politically motivated and do not reflect true market conditions.
He told a media conference here Tuesday after the conclusion of the 6th summit of the Group of Eight Islamic Developing Countries (D-8) that high crude oil prices, which had hit record levels of 146 USD per barrel, were “artificial” as production far exceeded demand.
“It’s a political issue that needs a political solution,” he said.
Ahmadinejad, whose country has the third largest oil reserves in the world, also charged the United States government for having a hand in the escalation of oil prices by keeping the US dollar low.
Analysts have said the low dollar is causing capital diversion from capital markets into commodity markets, which is one reason for the excessive speculation in crude oil futures.
The Iranian president said these factors were not allowing market forces of supply and demand to function as they should. “The market is full of oil,” he noted, pointing out that prices continued to rise despite the move by Saudi Arabia, the world’s largest oil producer and exporter, to raise output.
Ahmadinejad also said that continuous geopolitical tensions in Middle East, especially in the oil producing countries, would continue to exert upward pressures on oil prices globally.
Analysts say that surging oil prices are due to a combination of factors such as strong demand from China and India, geopolitical tension in the Middle East and speculation in the oil markets.
The Organization of Petroleum Exporting Countries (OPEC) expects prices to reach 170 USD per barrel in the coming months.