CARACAS, Venezuela — On the brink of collapse when oil prices plunged two years ago, a resurgent OPEC heads into its Caracas summit flexing plenty of muscle on the global economic stage — thanks in no small part to Venezuela and its ebullient president, Hugo Chavez.
Chavez — who defied world opinion in August by becoming the first head of state to visit Iraq's Saddam Hussein since the 1991 gulf war — has worked tirelessly to remodel the cartel into a consumer-friendly advocacy group as the Organization of Petroleum Exporting Countries begins Tuesday the second summit of its 40-year history.
"This reunion isn't only about oil," Chavez declared in a national TV broadcast late Monday. While OPEC leaders are determined to achieve a "fair price" for oil, they also will focus on global poverty, foreign debts and unfair terms of trade for developing countries in their search "for a more just world," he said.
Things were not so rosy for oil producing nations in 1998, when crude prices sank to $10 a barrel and OPEC, which produces 40 percent of the world's petroleum, was mired in bickering over quota busting. Industrialized nations, their economies buoyed by cheap oil, hardly noticed.
Now they are — demanding this week, at an International Monetary Fund meeting in Prague, the Czech Republic, that OPEC act to stabilize a gyrating oil market that has seen prices reach 10-year highs and prompted protests and long gasoline lines in Europe.
OPEC Secretary General Rilwanu Lukman of Nigeria said cartel members were "surprised" by the industrialized nations' refusal in Prague to cut taxes on oil products, which OPEC views — along with free market speculators and refining bottlenecks — as the real culprits behind high prices. OPEC has raised production to about 30 million barrels per day this year.
"We have done our part. We hope they cooperate by lowering taxes," Lukman said.
No production increases were expected at the summit, and most oil experts believe prices will remain volatile and high in the near future because of low inventories and the fact that OPEC is producing at near capacity. Saudi Arabia's oil minister, Ali Naimi, said the cartel may act before a Nov. 12 meeting in Vienna meeting "if necessary" as it pursues a price range of $22 to $28 a barrel.
Since his first election in 1998, Chavez has cajoled fellow leaders of developing nations to unite and confront what he considers to be the perils of globalization.
When oil prices fell in 1998, Venezuela plunged into a devastating recession it is still struggling to escape. Unemployment is officially at 15 percent, while some 80 percent of Venezuela's 23 million people live in poverty.
Chavez said Monday that his government was following the footsteps of the late Juan Pablo Perez Alfonzo, a Venezuelan energy minister who was a founding father of OPEC in 1960 and helped break the stranglehold of foreign oil companies on oil producing nations.
"And now, OPEC has arisen again," Chavez declared; its "resurrection" will rightly be celebrated "in this land of the birth of OPEC."
Vice foreign minister Jorge Valero said earlier Monday that Chavez wanted "to open a new dialogue between producers and consumers," obtain a balance between "fair prices and stable prices," and create a "platform" at the OPEC summit to initiate a dialogue with consumer nations.
Key to Chavez's success is his oil minister and OPEC's current president, Ali Rodriguez, a one-time leftist guerrilla and later attorney who has lobbied heavily for disciplined production to raise oil prices. In 1999, Rodriguez cut a deal with Saudi Arabia, the world's biggest producer, and non-OPEC member Mexico to reduce production by 2 million barrels a day and reverse the slide in prices. That move encouraged the rest of OPEC's 11 member nations to follow suit.
As a result, Venezuela's oil exports surged last year by 33 percent to $16 billion, and it expects to earn $26 billion this year. Venezuela's economy, which shrank 7 percent last year, has grown this year by 1.5 percent.
Others members are prospering. Saudi Arabia's trade surplus is expected to surpass $45 billion this year, while Iran, the second-largest OPEC producer, is equally gleeful about the additional $1 billion it earns from each $1 increase in the price of oil.