It's the new "C" word according to Melissa Francis, co-host of CNBC's "The Call." Using the word "cartel" to describe OPEC is officially a no- no.
Francis, who was on location in Vienna, Austria at the OPEC summit, reported on an exchange between herself and Ali Al-Naimi, the oil minister of Saudi Arabia during the May 28 broadcast of "Squawk on the Street." In an interview, Al-Naimi took issue with Francis using the word "cartel" to describe OPEC:
Francis: When do you think we'll hit that $75-to-80 range that seem like almost everybody in the cartel agrees is sort of the equilibrium price?
Al-Naimi: You have to be careful calling OPEC a cartel. I resent that.
Francis: How come?
Al-Naimi: Cartel does not apply to OPEC. I know the press uses "cartel" in a derogatory manner, but it shouldn't be.
Francis: What's a better word?
Al-Naimi: It's an organization.
According to the Merriam-Webster Collegiate Dictionary, a cartel is "a combination of independent commercial or industrial enterprises designed to limit competition or fix prices." Since the member nations of OPEC (Organization of the Petroleum Exporting Countries) have nationalized their oil industries for the most part, that definition would apply. Even OPEC's mission statement on its Web site says it exists to "ensure the stabilization of oil market":
OPEC's mission is to coordinate and unify the petroleum policies of Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.
Nonetheless, Francis told CNBC "Squawk on the Street" co-host Mark Haines and Erin Burnett she did not intend to use the word "cartel" to describe OPEC again.
"Let's recap - they resent it, it doesn't apply, it's derogatory, they're an organization," Francis said. "And then he said to me afterwards, ‘You know, you don't call G8 a cartel. There are a lot of other organizations you don't call a cartel. Why are we a cartel?' So I pretty much think it's the new ‘C' word. I know I'm not gonna use it again."
Haines, in a show of defiance, continued to refer to them as a cartel.
"Cartel," Haines replied. "Cartel, cartel, cartel. They're a cartel. Somebody got up on the wrong side of the drilling rig. ‘You'd better be careful.' Anyway, thank you Melissa Francis - they are a cartel."