OPEC will not ask Russia to cut production of its oil, according to its Secretary General Abdalla el-Badri. But he thinks the financial crisis is affecting the oil market and OPEC might ask for help from non-member countries.

“The market was stabilising at the beginning of 2007. However, because of speculation – very extensive speculation – on the oil market and the labour market we now see a very high price.  However, this speculation came from the subprime mortgage in the U.S.  With the collapse of the subprime mortgage, they used oil as a financial asset. So they used that and pricing started going out of control,” Abdullah al-Badri said.

Al-Badri believes the oil market needs more regulation to prevent speculative trade from affecting the price too much.

“I don’t say we should eliminate speculative activities from the market; I’m talking about excessive speculation,” he said.

“This is really gambling. At one point in time there were three billion barrels in speculation in the global market while in trading there were 66 million barrels a day. People were selling and buying unproduced oil – a paper market.”

He added: “What we want is to regulate the market, to watch the market and not allow excessive speculation and not to let the price go wild as happened in July this year.”

The OPEC General Secretary dismissed criticism from the British Prime Minister Gordon Brown, who was quoted by the press as saying that cutting oil production now would be “absolutely scandalous”.

Al-Badri said: “If Mr Brown is really concerned about his people he should reduce the taxes. We are free to take whatever decisions we think will protect the citizens of our countries and the interests of our members.”

“The situation [in the financial market] has been created in the United States and should be solved in the United States. Mr Brown in particular should work to solve this problem because he worked as Finance Minister for so many years and he should have looked into the problem and solved it before it happened and before criticising any other countries.”

The oil cartel head said that while OPEC does not knock on everyone’s door to call in new members, Russia would be welcomed if it chooses to apply for membership.

“Russia is a very important oil producer with a lot of knowledge and experience. I don’t know if it wants to join OPEC or not, but if it does, it is always welcome,” he said.

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