CARACAS, Venezuela — OPEC agreed on Thursday to leave oil output unchanged near its full capacity, rejecting a suggested cut by host Venezuela, the cartel's leading price hawk.
The Organization of the Petroleum Exporting Countries worries that $70-a-barrel crude could backfire on it by slowing global economic growth.
"We are not comfortable with prices at such levels because they are not supported by fundamentals and contain within them the seeds of further volatility that ultimately will be to the detriment of all," said OPEC President Edmund Daukoru of Nigeria.
Producing at full stretch, OPEC's leverage in world oil markets is limited. Refinery bottlenecks, Iran's standoff with the West over its nuclear program, supply disruptions in Iraq and Nigeria and a rush by investors into commodities have fueled crude's price spike.
Saudi Oil Minister Ali al-Naimi said world oil markets were "oversupplied and overpriced".
Venezuela had argued that world oil inventories were in surplus and OPEC should consider reducing output to prevent a price slump.
Politics and Oil
Venezuelan President Hugo Chavez, in a speech to oil ministers, accused Washington of trying to destroy OPEC, criticized the American way of life as a waste of energy resources, and hailed OPEC as a defender of the Third World against imperialism.
"For a century we gave away oil to slake the thirst of developed countries while our people in Africa, Asia and Latin America sank into underdevelopment, misery and backwardness," Chavez said.
Such rhetoric makes some in OPEC uneasy. Since the 1970s, it has worked hard to avoid politics and build a business-like reputation as a reliable oil supplier.
"Politics is anathema to OPEC. They prefer to avoid it at all costs," said consultant Gary Ross of New York's PIRA Energy.
"From their perspective there's no need to politicize oil because it makes their consumers nervous which in turn can lead to policies that reduce or constrain oil demand growth which is not in OPEC's national interests."
Chavez has championed a campaign for Latin American energy producers to claim a greater share of booming oil profits from foreign investor companies.
He said Caracas and others in OPEC were considering switching some oil sales to euros from dollars to defend against the falling value of the U.S. currency.
Iran's Oil Minister Kazem Vaziri-Hameneh said Tehran already was pricing some exports in euros.
Venezuela sells most of its crude to the United States but is planning to double sales to China and exports some crude to Europe through a location swap with Russia.
While Caracas has support from Iran for keeping prices as high as possible, OPEC delegates say leading producer Saudi Arabia and others would prefer a $50-$60 range.
Their biggest concern is that energy inflation could trigger a slowdown in global growth and hit oil demand.
So far the economy has proven surprisingly resilient to a rise in oil prices that has added $40 to the value of a barrel in three years since U.S. forces entered Baghdad.
"As prices rise, the risks to the global economy grow but at the moment prices are a headwind for the economy rather than a brick wall," said PIRA's Ross.
OPEC next meets in Vienna on September 11 and then in the Nigerian capital Abuja on December 14.
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