OPEC is central bank for world's oil, says UAE official

Countering the view that OPEC is just a 'cartel', the organisation's UAE envoy today likened it instead to a 'central bank' for global oil supplies.

Ali al Yabhouni, the UAE’s OPEC governor.

The UAE's envoy to OPEC today compared the organisation to a central bank for the world's oil supply.

"Whenever the market is running short or is oversupplied and prices are going through huge volatility, they call on OPEC to step in and make the right adjustment or intervention," said Ali al Yabhouni, the UAE's OPEC governor. "OPEC is acting as a central bank."

Mr al Yabhouni said OPEC had enough members and a large enough share of the world energy market - including supplies other than oil - to fulfil that role.

In an earlier speech to Petroleum Institute students today, Mr al Yabhouni recalled his studies in the US, where business professors did not routinely associate "OPEC" with "central bank".

"Whenever they refer to 'cartel,' they always refer to OPEC as the best example," Mr al Yabhouni said, but added that his own views were shaped by what he joined after beginning his work in the energy industry in his home country.

"Seeing and feeling is believing: OPEC is not a cartel.

"OPEC is not just about defending the interests of oil producers. It is about making a contribution to the energy market."

* With Tamsin Carlisle