Iran’s hard-line president declared that crude oil prices, now above $115 a barrel, are too low, state media reported Saturday.
President Ahmadinejad told an oil and gas exhibition in Tehran on Friday that he thought the commodity still had to “discover its real value,” according to the Web site of Iran’s state-run television.
Oil prices have hit all-time highs above $115 a barrel in recent weeks, amid reports that oil and gasoline reserves in the United States were lower than expected and as the dollar sinks to record lows.
“The oil price of $115 a barrel in today’s global markets is a deceiving figure. Oil is a strategic commodity that needs to discover its real value,” the Web site quoted Ahmadinejad as saying.
Crude oil futures surged to a new trading record of $117 a barrel Friday following an attack on a key pipeline in Nigeria. The increase capped a week of record highs fueled by supply woes and the dollar’s weakness relative to other major currencies.
Ahmadinejad said despite high oil prices, the true value of crude oil, adjusted for inflation, is currently less than what it was in 1980.
“While the price of other commodities have increased, the economic value of the current oil price is even less than 1980,” he said.
But some figures suggest that today’s crude prices might have surpassed inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.
Ahmadinejad accused Western industrialized nations of “selfishness” in their quest for cheaper oil.
“When they get hold of oil, they assume that oil is a free commodity and belongs to them and has wrongly been placed in other territories. … This is the spirit of selfishness and arrogance,” Ahmadinejad was quoted as saying.
A host of supply and demand concerns in the U.S. and abroad, along with the dollar’s weakness, have bolstered oil prices, even as record retail gasoline prices in the U.S. appear to be dampening demand.
A weaker dollar makes commodities such as oil less attractive to investors as a hedge against inflation, and it makes oil more expensive to investors overseas. Analysts believe the weaker dollar is the primary reason oil has soared this year. The effect tends to reverse when the greenback gains ground.
Ahmadinejad called the U.S. currency “a handful of paper” without any global support.
Iran has stopped using the U.S. dollar in its oil transactions with the outside world, switching to currencies such as euro.
“The dollar is not money any longer but a handful of paper distributed in the world without commodity support,” the Web site quoted Ahmadinejad as saying.