Saudi Arabia, still the world's largest oil producing nation and the key "swing" exporter on global markets, is dominating the 138th OPEC ministers' meeting opening in Kuwait City Monday, backed by Kuwait and other traditional moderates in the 11-nation cartel that controls around 40 percent of global annual oil output.

But even most of the traditional "hawk" nations that have usually sought to push oil prices as high as they can go either to support large populations or to fund radical political agendas, or both, are mostly quietly going along with the moderate Saudi line.

Even Iran, hanging tough in its confrontation on nuclear policy with the United States and the European Union, under its hard-line new President Mahmoud Ahmadinejad, is happy with current near-record high global oil prices around $60 or more a barrel and is anxious to avoid isolating itself further after Ahmadinejad's threat to annihilate Israel and denying the historical reality of the Holocaust in World War II prompted angry condemnation from around the world.

Also, with resentment against hard-line religious policies still bubbling below the surface, Iran is not risking endangering its oil export revenues that account for 80-90 percent of total export earnings and up to 50 percent of its annual budget

Libya under Moammar Gadhafi, usually one of the most reliably anti-Western nations to call for as high oil prices as possible in the cartel, is now on best behavior after brokering a nuclear non-proliferation deal with the West.

Algeria, another traditional hawk, has maintaining its precarious social and economic stability as its top priority these days. It also needs to maintain good relations with the European Union in general and France in particular. Therefore its leaders are not in a hawkish mood either.

The small Gulf nations are worried most of all by the continuing instability in neighboring Iraq and by Ahmadinejad's increasingly erratic and unpredictable behavior, and growing grasp on power in Iran, where he is purging key government ministries and power sources to strengthen his own position.

They are eager for the United States and NATO to take a greater role in the region to prevent any potentially catastrophic nuclear exchange between Israel and Iran, and therefore the last thing they want to do is risk alienating the very Western nations they hope will be their protectors.

Indonesia today is under the leadership of strongly pro-American president Susilo Bambang Yudhoyono. Yudhoyono has boosted his vast nation's security cooperation against Islamist extremists, especially Jemaah Islamiyah. The efforts have led to a number of striking anti-terror successes. Also, the dominant U.S. role in leading international rescue efforts after Indonesia's tsunami catastrophe a year ago has boosted U.S.-Indonesian ties. So Yudhoyono is not out to challenge the Saudis nor to upset the cautious OPEC consensus.

That leaves Nigeria, which would certainly always like to push oil prices higher. But it has been having security problems of its own, and is mindful of growing competition from Russia -- now second only to Saudi Arabia as an oil exporter and the world's largest exporter of oil and gas combined -- and from Kazakhstan and other nations in the Caspian Basin.

Nigerian government leaders do not share the fears of Gulf nations about Iran and Iraq, but they are concerned about maintaining and extending their market share, and avoiding pricing themselves out of the market.

That only leaves Venezuela's firebrand President Hugo Chavez as an old fashioned OPEC price hawk. He would be perfectly willing to challenge the United States in particular, but even he cannot challenge such a dominant consensus.

Ultimately, however, OPEC's relatively moderate policies now, like its super-hawkish ones of decades ago, reflect economic reality more than anything else. The ever-rising global demand for oil led by China and the prospect of continued serious insurgent violence in Iraq, as well as growing fears over rising U.S.-Iranian intentions have already ensured that oil prices are on the rise again, and likely to stay that way over the winter.

Therefore for all the worries that the OPEC nations attending the Kuwait City have, keeping global prices for their crude exports high is not one of them. That makes it a lot easier for them to play nice guys.

related report
OPEC Tries To Play It Safe
By Martin Sieff
UPI Senior News Analyst
Kuwait City (UPI) Dec 10 - Thirty years ago, the world trembled every time the Organization of Petroleum Exporting Countries held a summit. But when OPEC leaders gather in Kuwait City Monday, while global business chiefs will watch closely, they will not be trembling.

OPEC leaders have already made very clear that Monday's meeting is intended to stabilize the world's economy, not undermine it. Kuwait's own oil minister, Sheikh Ahmad Fahd al-Sabah, who is the current president of OPEC, said Saturday that global oil prices, currently just over $60 a barrel, were at an "acceptable" level.

OPEC's production is maxed out at the moment, but Sheikh Ahmad and other OPEC leaders have made clear that the cartel is prepared to maintain its current enormous levels of production to prevent oil prices going through the roof because of heating demands in the northern hemisphere over the winter.

"We will continue with our production levels," Sheikh Ahmad said.

Those levels are already about as high as they can be: OPEC's member nations -- Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela -- are pumping at nearly full capacity for a combined total output of around 30 million barrels per day, over-shooting their 28 million barrels per day official output ceiling.

Sheikh Ahmad was expressing the overwhelming consensus in the 11-nation cartel: Saudi Arabia, Nigeria, Algeria, Indonesia, the United Arab Emirates and even Iran have all publicly committed themselves to maintaining their current high production levels.

The OPEC members also look set to renew their current agreement that Saudi Arabia, the world's key "swing" oil producer over the past four decades, should continue its current commitment to be ready to pump an extra 2 million barrels per day into the global marketplace if demand requires it.

Indeed, the cartel, far from wanting to keep global oil prices at their current almost record levels, is quietly planning to try and bring them down by possibly $5 to $10 a barrel next spring and summer after winter passes. The OPEC members have no plans to deliberately try and raise or maintain existing global market prices for oil unless they fall by at least one third from current levels to below $45 a barrel.

And they are coordinating the development of additional capacity for the global market so that even continued increased demand from China's dramatically growing industrial economy will not put more long-term structural pressure on global prices.

All this is a far cry indeed from the way OPEC leaders behaved 30 years ago. For the OPEC of today is a very different body, with a very different approach to the world, than the apparently all-powerful cartel that tripled real global prices after the 1973 Arab-Israeli War and dramatically shifted the global balance of economic power.

Then, OPEC was a young, revolutionary organization. It had only been founded a decade and a half before in 1960 and had just discovered its intoxicating new strength. It was determined to change the world and bring unprecedented wealth and power to the governments that controlled oil -- the world's most important energy resource. And it succeeded.

OPEC was also secure and confident. From conservative Saudi Arabia and Iran to revolutionary Algeria and Libya, its members in the 1970s were convinced they were on the cutting edge of history, and that they could raise the price of global oil to their hearts' content and suffer no backlash from it.

But the national governments whose representatives are meeting in Kuwait City Monday understand the power of backlash -- political, financial and even military -- all too well. They know that the United States wiped out the fourth or fifth largest and most powerful land army in the world -- Saddam Hussein's in Iraq -- in a matter of days in the first Gulf War in 1991 as a direct response to Iraq seizing its tiny neighbor Kuwait, the host of this 138th OPEC summit.

And they also know that from the bleak 1980s and the even grimmer 1990s, that if they over-price their resource, precious as it is, they cannot get away with it forever, or even for long. Alternative energy resources and other oil reserves it was previously too uneconomic to develop will rapidly emerge as significant forces on the global scene and the value of their own holdings may be devalued for a generation as a result.

Also, while OPEC is once again the commanding coordinated force in the global oil market, it is far from the dominant player in it that it was in the 1970s. The 11 OPEC nations combined accounted for only 36.1 percent of global oil output in November. While other nations, especially Russia, now the world's number two oil exporter, usually work smoothly with OPEC in oil price negotiations, they have the potential to go their own ways and cut their own deals if OPEC overplays its hand. The same goes for the rising Central Asian oil pricing nations led by Kazakhstan.

The OPEC of the 21st century, therefore, has become a reassuring force for global stability that is a far cry from the frightening and revolutionary swagger it cut on the world stage a generation ago. It is the reassurance, not the revolution that is playing before its global audience on Monday

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