International O.P.E.C. oil price rise this year unlikely

Press, 9 May 1978, Page 9

International O.P.E.C. oil price rise this year unlikely

NZPA-Reiter Taif, Saudi Arabia

Oil Mhisters from the Organisatim of Petroleum Exportiig Countries agreed during i week-end of informal talks that oil prices would lave to rise — but not or when the increase should take place. Saud Arabia’s Minister (Sheiki Ahmed Zaki Yamani) t»ld a press conference yesterday that he did not think there would be any increase this year. But he acknowledged that some of the 13 O.P.E.C. menders would be pressing for a price rise when the oil Ministers meet formally in Geneva on June 17. The main debate was between countries such as Sauci Arabia, which insisted that market conditions should rule price strategy, and members such as Algeria which argued for gradual price increases sorting as sion as possible. An early increase would avoid a sudden price leap when the present wo/Id surplus of oil turned /into a

shortage at some time in the future.

The current O.P.E.C. president, the Venezuelan Oil Minister (Mr Valentin Hernandez), argued for step-by-step increases to be announced in advance, but reluctantly accepted that the first step might come later than Venezuela would like.

The basic price of crude oil has stood unchanged at SUS 12.70 a barrel since January 1, 1977, and Sheikh Yamani’s remarks suggested that the freeze would last for at least two years. The only positive outcome of the Taif meeting was a decision to set up a committee of six Ministers to review O.P.E.C. strategy. But, even in private discussions, delegates confirmed public statements by Ministers that the talks had created a new spirit of togetherness which would overcome differences over short-term price policy.

The Kuwaiti Oil Minister (Mr Ali Khalifa’ Sabah) said the meeting had been the most productive O.P.E.C. session for many years.