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Financial Times: Differences in OPEC Magnified

Author: Dennis C. Blair, Former Commander-in-Chief of the Pacific Command
June 13, 2011

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In the Financial Times, David Blair writes about the proceedings of OPEC's latest meeting - where Saudi attempts to ease Western oil supply woes were defeated unexpectedly by an Iranian-led coalition.

Until this month, Mohammad Aliabadi's main task was to prepare Iranian athletes for the 2012 London Olympics. Then, on June 2, the head of his country's National Olympic Committee was suddenly appointed oil minister. Within just five days, he was sweeping into Vienna in a black limousine with Austrian police escort to take the helm of the most highly charged OPEC meeting in recent history.

The honour was his because Tehran holds the oil cartel's presidency for the first time since 1975 – not, in other words, since the days of the shah. Just as notably, Mr Aliabadi, a former director of a brick company and “acting minister of agricultural jihad”, lacked any experience of oil policy.

Ahead of the meeting, the oil market had apparently convinced itself that the neophyte representative of one of the world's most isolated regimes was about to announce the first upward revision of OPEC's production quotas for almost four years. What happened next raises crucial questions about the balance of power within OPEC and its future credibility.

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