While most of us are pretty amazed at just how high oil prices have risen recently (ended the week at $116.69), one man thinks that oil is still pretty cheap compared to its true value. According to Iranian President Mahmoud Ahmadinejad, oil prices have yet to hit fair value.

Speaking in front of an oil and gas exhibition in Tehran, Iran's President stated that the Western world was "selfish" in its desire to obtain cheap oil. A big reason for the recent run up in oil prices can be attributed to the weak U.S. dollar, and Ahmadinejad definitely made it a point to bring up the weak currency, calling the dollar "a handful of paper" with no global support.

While I take most of what I hear from the Iranian President with a grain of salt, as far as the dollar is concerned, he does make a decent point. Over-exaggerated, yes, but still a valid point. The dollar has been steadily falling and with more interest rates on the horizon it will only weaken further as the year progresses.

Iran is one of a handful of countries that have opted to sell its oil to the outside world in euros as opposed to the dollar, a trend that America is hoping will not continue to spread to other oil-rich nations.

When we talk about oil prices, one thing that is never completely apparent is how today's prices compare to the early '80s on an inflation-based comparison. From what I have seen from many sources, the inflation adjusted highs from 20 years ago can be translated to about $103 a barrel. While these figures definitely vary depending on what source you are reading, I have never seen any inflation adjusted numbers that were above the $110 range, much less the $115 range where prices are hovering now.

But that did not stop the Iranian president from concluding that oil is cheaper now than the inflation adjusted highs a couple decades ago.

I do agree with Ahmadinejad on one fact: oil prices will be headed higher over the next couple of months as we enter the peak demand summer months. Whether or not prices will be able to maintain their current levels in the long run is another question. Unlike the Iranian president, I do not think that oil can maintain these levels. Once the dollar starts to recover, oil prices will definitely come back down to earth. Just how far down they will go remains to be seen.