$200 oil warning at summit

Dubai: The UAE said yesterday it remained committed to supplying oil to the international market and continue to invest more in oil to raise production capacity.

The statement was made by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan after his arrival in Riyadh yesterday, heading a UAE delegation to the third meeting of heads of member states of the Organisation of Petroleum Exporting Countries (Opec), which began on Saturday.

"We believe in the need to invest more to boost production, but we also believe in the need to ensure security of demand against the security of supply," Shaikh Khalifa said.

The statement came ahead of the rare Opec summit that began with Venez-uelan President Hugo Chavez issuing a chilling warning about oil prices in a speech that also urged the group to be actively involved in foreign policy.

Chavez said in his speech that crude prices could leapfrog to $200 a barrel from their current record level of near $100 a barrel if global tensions escalated. "If the United States was mad enough to attack Iran or aggress Venezuela again the price of a barrel of oil could reach $150 or even $200," Chavez was quoted as saying by Reuters. He urged Opec leaders to club together for geopolitical reasons.

UAE reaffirms supplies

Chavez's remarks were tempered by Saudi King Abdullah, who said that "oil is an energy for construction and must not become an instrument for conflict".

King Abdullah also announced that Saudi Arabia would invest $300 million to develop technology to tackle climate change.

The two-day summit in Riyadh is intended to map out the strategic direction of Opec, a point underscored in Shaikh Khalifa's statement.

"Since its establishment 47 years ago, Opec has proved its ability to deal positively and effectively with various developments witnessed by oil markets and the global economy," the President said, noting that the group — which produces about 40 per cent of world oil — managed to achieve a balance in oil markets without compromising on supplies.