VIENNA, Feb. 1 — You'd think oil producers would be nervous these days. Several of them are facing serious trouble at home, consumers are increasingly defiant about high energy costs, and President Bush took a swipe when he deplored America's addiction to oil and set a goal to cut imports, particularly from the Middle East.
But for Ali al-Naimi, Saudi Arabia's oil minister, none of this is worth losing any sleep over. As long as there is an appetite for oil, Saudi Arabia, the world's largest producer, will be in business. In fact, Mr. Naimi was so busy — dashing off to Vienna for an OPEC meeting, after trips to India and China — that the presidential jabs against Middle Eastern producers got nothing but a big shrug out of him.
"OPEC is a business organization, not a political organization anymore," he said on Tuesday while taking a stroll through Vienna's streets, hours before the president's speech. "All the member countries want one thing; they want more money. All of us have benefited from this de-politicized organization. I have never deviated from that. We are oil ministers, not foreign ministers."
For Mr. Naimi, oil politics are better left to the diplomats. Sure enough, on Wednesday, as Mr. Naimi declined to comment on the president's speech, Prince Turki al-Faisal, the Saudi ambassador to Washington, said he would ask the White House to clarify exactly what the president had meant.
While Mr. Bush was making a political argument out of oil, Mr. Naimi stressed that OPEC had transformed itself in recent years. Gone are the militant years, when OPEC ministers barged into meetings and threatened to unsheathe their oil weapon only to discover, much too late, that it could be a double-edge sword.
With Mr. Naimi's frantic pace, it is hard to believe producers are feeling any heat from critics. Demand for oil is still growing despite the doubling of oil prices in two years. Forecasters expect it to grow by a two million barrels a day this year, even as analysts see crude oil prices staying well above $50 a barrel for a while.
On Friday, crude oil futures on the New York Mercantile Exchange closed at $65.37 a barrel, up 1 percent.
In many ways, these gains are a result of OPEC policies engineered and enforced by Mr. Naimi within the Organization of the Petroleum Exporting Countries since the late 1990's. OPEC has also been helped by a growing global economy; a boom in Asian countries like China; a scarcity of refined oil products around the world; and production disruptions in Iraq, Venezuela and, last summer, the Gulf of Mexico.
OPEC said Tuesday that it would continue pumping all it could to keep enough oil in the global markets in an attempt to lower prices.
So far, OPEC has been more successful in propping up crude oil prices than the opposite, especially after prices collapsed to $10 a barrel in the late 1990's.
Under the leadership of Mr. Naimi, OPEC managed supplies in line with oil stocks in consuming nations. By fine-tuning the group's output, and frequently raising or cutting its output, OPEC was able to influence oil markets and nudge prices back up.
To micro-manage the markets, the group also increased the frequency of its meetings, which in the 1990's took place only twice a year at OPEC headquarters, a boxy building overlooking the Danube River. But since 2000, OPEC ministers have met a total of 34 times, a period that coincided with the run-up in oil prices. (Just last year, the conference convened six times, one meeting short of 2001 and 2003.)
For many analysts, OPEC is now powerless to bring prices down.
Mr. Naimi disagrees.
"That's nonsense," he said. "OPEC has not lost control of the market. It is an organization that has dedicated itself to the reliability of supplies and the lessening of the volatility in the markets."
Still, these days, that mission is proving particularly challenging. For one, OPEC's main tool in managing global supplies — its production lever — is broken. As a group, OPEC has only about 1.5 million to 2 million barrels of untapped output, and most of that is in Saudi Arabia. This means the group does not have much more oil to pour into the markets to help bring prices down.
"OPEC is an anachronism today," said Roger Diwan, a managing director at PFC Energy, a Washington-based industry consultant. "This is not a market where suppliers have to manage any spare capacity. They cannot manage the short-term risk, which is going to be on the upside. What we're seeing here is a demand shock, but everybody is looking to OPEC as if it were a supply shock."
Still, Mr. Naimi has reasons to feel vindicated. There are no signs that consumption is being hurt by high prices — in fact, demand keeps rising.
Asked whether he was surprised that demand had not dropped despite the high prices, he said, "Oh, I am not surprised because there is no longer a direct relationship between the two, because the cost of energy is a smaller part of the economy compared to the 1970's."
The Paris-based International Energy Agency has forecast that oil demand will grow by 2.2 percent this year, to 85 million barrels a day. Last year, consumption rose 1.1 percent and in 2004, it grew 3.8 percent, more than twice the average growth of the last decade.
"OPEC wants the maximum price they can sustain to meet their budgetary needs and investment plans, and keep their economies growing, while making sure that demand in the rest of the world keeps growing," said Yasser Elguindi, a senior managing director at Global Medley Advisors, a consulting firm for hedge funds. "The Saudis have hinted they believe that price was now between $50 and $60 a barrel."
On Tuesday afternoon, Mr. Naimi chose to stroll through the narrow streets of Vienna, as he often does when OPEC meets here, preferring the 15-minute walk back to his hotel to the quicker drive in the black limousine waiting for him.
As Mr. Naimi sped along, passers-by looked on with curiosity at the man with the fur cap and the band of Austrian security officers and reporters glued to his every comment.
"I keep telling you guys," he said to them, "if you know a customer who wants oil, send him to me."
Copyright 2006The New York Times Company