Gulf Oil CEO: Decision on Meeting Chair Hurts OPEC's Credibility

NEIL CAVUTO, HOST OF “YOUR WORLD”: All right, well, he’s called for death to America. Now Iran’s president is set to chair OPEC’s meeting next month in Vienna. Can you believe this? All this as oil prices shoot up and stockpiles come down. And this is the guy America’s got to answer to?

To the CEO of Gulf Oil, Joe Petrowski.

You know, Joe, when I heard this, I said surely it’s a joke. How could Ahmadinejad be in a position to be running OPEC? But then I looked at it. There are not that many players. They rotate this thing. He’s the guy who is rotating, and I am worrying. Should I be?

JOSEPH PETROWSKI, CEO, GULF OIL: Well, it’s fabulously astonishing, despite the 12-person rotation in OPEC, that an organization that says they are committed to market stability chooses now as a leader to get on the soapbox who has called the Holocaust a myth, wants to wipe Israel off the map, and even questions the story on 9/11, our own tragedy. So, it’s amazingly astonishing and embarrassing that OPEC would have him as their spokesperson.

CAVUTO: All right, now, since this was at least to me an unexpected development, but you follow these markets much closer -- others have told me it was inevitable given the cycle in the leadership role -- what happens then? Would he take advantage of that? Would he try to stick us in that or what?

PETROWSKI: Oh, economically I’ve always thought OPEC is an overrated organization. Half of OPEC’s production comes from countries that are favorable to us, like Saudi Arabia, United Arab Emirates, Kuwait, and Iraq. And they represent 50 percent of the production in OPEC.

But it is a soapbox. It is an organization that gets a lot of coverage and it’s a shame that we’re going to be giving -- we’re going to give this person a lot more airtime to espouse his views.

Will the other countries follow his views? No, I don’t think so. So, I don’t think there is a lot to worry about but to have to listen to him -- and it really does pull down OPEC’s credibility, at least their political credibility. I’m not sure they have as much economic credibility as we sometimes give them.

CAVUTO: Joe, while I’ve got you here, much talk in this country and investigations ensuing, in fact, more investigations into whether these prices are fixed by speculators or oil guys maybe even like you than drilling for more oil.


CAVUTO: I don’t mean to offend.

But what do you make of that, and whether there is at least on the speculator front, that they are gunning...

PETROWSKI: Well, speculators are in the market, Neil, but where were the speculators when oil was $37? Were they on vacation?

Speculators follow markets that have underlying fundamental anomalies, whether government-created or market-created, whether it’s housing I.T. stocks or oil. Get the supply up, get the demand down, let the market perceive that we’re going to be less dependent on unstable places like the Mideast, and the speculators will find one other market or another market to go away.

(CROSSTALK) CAVUTO: Well, do you think oil prices are going to go down from here, gas prices as well? Or is there going to be that sticky divide?

PETROWSKI: I said a while ago I thought it would be below $100. It went below $100.

CAVUTO: Right.

PETROWSKI: We have bounced back today. I think that’s short-term. I think we’re going to be lower right into July 4.

But, ultimately, how low we will be will be a device of our own creation. If we go on policies that increases non-OPEC supplies and we do everything to differentiate the demand, we’ll be fine.

CAVUTO: Joseph, always good having you on. Thank you very much, Joe Petrowski in Newton, Mass., the Gulf Oil CEO.

PETROWSKI: Thank you.

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