Exchange Rate Policies in the Gulf: A New Challenge to American Preeminence?

Like hundreds of other decisions taken by the Organization of Petroleum Exporting Countries since it was formed 47 years ago, the decision taken two weeks ago not to respond to American urgings to boost oil production came in for heavy criticism by the U.S. administration. In many previous cases, OPEC refrained from open confrontation with the U.S. This time, however, the cartel chose to rebuff American claims with unprecedented forcefulness. The President of OPEC, Chakib Khalil, argued that nervousness in the oil market stemmed from the "mismanagement" of the American economy and that the jump in oil prices reflects, not inadequate supply, but rather the weakness of the dollar and the prevailing uncertainty in the financial markets.
 

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