Q&A: 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Palast: Nevertheless you must have known that your actions in rebuilding OPEC into a real - powerful - organisation had to upset the government of the United States and put you in hot water with the American government; that rebuilding OPEC, which was due to your actions, had to incur the wrath of the American government?

Chávez: The truth is that when our government came to power, even before then, we were in touch with countries like Saudi Arabia, Mexico (which is not from OPEC but very close to us here) and all the other OPEC members, in order to find a price balance. The price was way too low, it was $7 per barrel, which was almost a gift. I once gave this speech, initiating the OPEC conference here in Caracas, and I said something that made everybody laugh but it's absolutely true: a barrel of oil costs $14-15 (this was in 1999) while a barrel of whisky costs 10 times that! A barrel of wine costs far more. A barrel of ice-cream costs three times a barrel of oil - sunscreen, which women especially use on the beach, a barrel of that costs three times more than a barrel of oil. And it's not right that the price of oil is so low. This is about finding a fair price, one that is convenient for everybody from the consumers to the producers, in order to incorporate sustainability into the oil business.

Well, sincerely, I don't see how that policy could incur wrath in countries like the US or England, and I've tried to explain that policy to the leaders of almost every developed country. In London, for example, we held a meeting, the first time ever that an OPEC president has had a meeting with the national energy agency there, in which we talked for roughly three hours. I have spoken about this matter with Prime Minister Blair and President Chirac, with President Aznar, with the King of Spain, with President Putin, President Clinton, President Sampaio, with almost every leader of the developed world, Prime Minister Chrétien, the Prime Minister of Japan, trying to explain that it's also important for them to have a balance in the market, that we cannot fall again into that price volatility, when the prices were shooting to $40 and falling to $5.

It is convenient for everyone to have a fair and balanced price, so we in Venezuela produced the 'bands' system that got approved, which was a floor of $22 and a ceiling of $28, that's our strategy. And I believe that it favours the developed countries as well because it eradicates price uncertainty and gives security to their oil supply. I'll tell you something, President Clinton, the first time we met -

Palast: But Clinton isn't Bush.

Chávez: Well, I'm talking abut Clinton, whom I had the opportunity to speak with on three different occasions. The first time we met, he didn't understand the bands system, or to be more honest he didn't like it. They wanted low prices. But the third time we talked, he shook my hand and told me, "Chávez, I like the bands!" He had got it. He understood that a balanced price was necessary for the United States also. A balance between supply and demand of crude oil.