Q: The public opinion usually wonders how OPEC influences oil developments. Why is this issue so important? A: OPEC enjoys huge significance in Iran and the world. We produce oil and we have to identify the OPEC role further. However, we should neither underestimate nor overestimate this organization. OPEC is said to be an oil cartel but the fact is that this organization has no resemblance to a cartel. OPEC is an organization with enough experience in its 45 years of age. We have to know this body perfectly before making any judgment. All decisions adopted by this body are not necessarily correct but the expectations are often unrealistic. Q: The oil prices are on upward trend. What role does OPEC play? A: OPEC is not the sole player in the oil market but it is an influential decision-maker. OPEC plays its role at the time of crisis. When the prices are low this organization strikes a balance to the market to head off price fall. At the moment, certain efforts are under way to attribute the price hikes to OPEC that is not the sole supplier. The problem is now the shortage of oil products and refining capacity. In certain cases, the affairs of Nigeria, Venezuela, Iraq and Middle East might have given rise to certain causes of concern. OPEC is now pumping at full capacity. Q: What do you think about the policy of détente promoted by outgoing president Mohammad Khatami? A: The Jakarta conference was a dark spot in the OPEC history leading to a sharp fall in the prices. Khatamis détente policy created conditions for cooperation between members of OPEC. We managed to reestablish ties with Saudi Arabia, the OPEC kingpin. OPEC would lose its influence when Iran and Saudi Arabia lie in long distance from one another. After the Jakarta meeting, members of the organization gathered on nine occasions to aver the price falls. Since its establishment in 1960, OPEC has sought to meet its objectives and its members serve their own interests. The organization has hit snags including the Iraq-Iran war and the Iraqi invasion of Kuwait. Today, OPEC members converge from time to time to define their policies. Q: What crudes comprise the new OPEC basket? A: Saharan Blend of Algeria, Minas of Indonesia, Iran Heavy, Basra Light, Kuwait Export, Es sider of Libya, Bonny Light of Nigeria, Marin of Qatar, Arab Light of Saudi Arabia, Murben of UAE and Bcf-17 of Venezuela. These countries have been picked up according to their influence on the market. Each country has its own share. Q: What are the advantages of new OPEC basket? A: This new basket gives a more realistic image of OPEC crudes. Psychologically, it influences the market and it can avoid unrealistic prices. Q: How do you compare the heavy and light crudes in the OPEC market? A: The oil market is filled with different crudes. The important thing is access to complicated technologies and refineries. Today, the refineries are working at their full capacity but they cannot meet the demand. Q: How do you assess Irans influence on OPEC developments? A: Cooperation between OPEC members came to fruition in 2000 and the prices went on upward trend. OPEC agreed to Irans proposal for fixing the price bands between 22 and 28 dollars a barrel. This mechanism did contribute to a balance in the market. Iran also convinced OPEC members to make the basket real. Q: What is your view of the oil price hikes? A: There are two kinds of views: The first group believes that the oil prices have hit their highest level and no more reserves are identifiable. They warn of oil shortages and a rise in the prices. This view has its supporters in our country but we should not accept it totally. The second group says we have yet to hit the production peak. Our main challenge, for them, is high energy consumption requiring huge investment. In the past couple of years, the oil prices have grown due to increasing demand in India and China, geopolitical factors, bottlenecks in oil consumers and certain political and military tensions in the Persian Gulf. The oil market is getting acquainted with speculation and that is not promising for the future. Q: What programs has the Iranian government for its OPEC membership? A: We should see what plans the new government has in this regard. Iran joined OPEC 45 years ago and it has been a major player. Changes are in the offing but I cannot say all. Q: What do you think about demand for oil prices? A: Global demand for oil has been on upward trend in the past years. The International Energy Agency estimates that world demand for oil would stand at 84.3 million barrels by end-2005. The main reason for the price hikes is the reinforcement of cooperation between OPEC members. To this effect, Irans policy of détente has been very important.