As Oil Prices Fall, Tensions Among OPEC Members Seem to Deepen

For the first time in a decade, oil producers are facing a real test of their unity.

As the OPEC cartel meets in Cairo on Saturday, exporters are being pummeled by a triple whammy of lower prices, falling demand and declining revenue. The group, whose members account for more than 40 percent of global oil exports, is desperately seeking ways to stop the drop in prices, which have fallen from their summer peaks at a record pace.
The drop in prices is threatening the economic and political foundations of many oil producers. Iran’s populist president, Mahmoud Ahmadinejad, is expected to run for re-election next year while Hugo Chavez of Venezuela is being contested in local elections at home. Both countries need oil above $90 a barrel to balance their budgets, according to various estimates.

“The Iranians, the Russians and the Venezuelans, who had benefited the most from the rise in price, are the ones paying dearly now with the collapse,” said Lawrence Goldstein, a veteran energy analyst.

But while different producers have competing agendas, the drop in prices has been so rapid that even moderates are feeling the sting.

New York Times