OPEC rules out switch from dollar oil sales

The OPEC oil cartel will not switch dollar-denominated oil sales to the euro, despite the fall in the value of the US currency, the organisation's president said yesterday.

Mr Abdullah al-Attiyah, who is also oil minister for Qatar, said the dollar's decline versus other leading currencies like the euro and the yen had hurt OPEC revenues and helped oil importing nations.

"We are facing a very difficult situation with the dollar," he said in Qatar ahead of this week's Organisation of the Petroleum Exporting Countries meeting in Doha.

"The dollar has lost 20 per cent of its value against the euro. The customer is receiving a discount from us," he added.

The euro hit a record high last week at $1.19, rising 11 per cent since the start of 2003 and is up 45 per cent from a low of 82 cents in late 2000.

But Mr Attiyah said there was no prospect of a change that would erode the overriding power of the US dollar as a global currency.

"We will stick with the dollar. It is very difficult to change," he said. "Assume we changed to the euro and six months later the euro fell, we would have to switch back."

Any decision by OPEC to denominate oil sales in euros, even just to European customers, would severely undermine the dollar's status as the standard currency of international trade.

OPEC meets on Wednesday with oil prices near $31 for US crude, pricing the cartel's own index of crudes near the top end of its $22-$28 target range.

Mr Attiyah said there were no proposals to adjust that target band to compensate for the lower value of its dollar oil sales.

"We have no proposal to change the band, in my opinion $25 on average is good for consumers and producers," he said. "We never seek compensation for the rate of exchange."

Given high prices and with Iraqi exports set to start mid-month only at modest rates the group is expected to leave production limits unchanged.