Saudis unlikely to stand in way of ‘moderate’ oil rise

Press, 28 March 1979, Page 9

Saudis unlikely to stand in way of ‘moderate’ oil rise

NZPA-Reuter Geneva Saudi Arabia is unlikely to stand in the way of a gradual increase in oil prices above those already agreed by the Organisation of Oil Exporting Countries last

December, O.P.E.C. sources say.

Saudi Arabia’s Oil Minis ter (Sheikh Ahmed Zaki Yamani) told reporters at the O.P.E.C. meeting in Geneva on Monday that he was sticking by the December increases in the face of strong pressure for even bigger rises.

But Venezuela’s Energy Minister (Mr Humberto Calderon) said late on Monday night that there was a general feeling among O.P.E.C. Ministers that market conditions were ripe for a price increase above the 'evel agreed in December. And O.P.E.C. sources said they believed Saudi Arabia would not oppose a moderate, gradual increase in prices above those previously settled. The December meeting of O.P.E.C. in Abu Dhabi agreed a 14.5 per cent boost in oil prices, introduced in quarterly stages over the whole of 1979.

- Sheikh Yamani said on Monday that the O.P.E.C. meeting was almost deadlocked. After several hours of discussion, he told reporters some delegations were adopting “very extreme positions.” But Mr Calderon said, “Everybody wants to reach an agreement.” He said that there were three or four suggestions on the table for higher prices. These ranged from the bringing forward of the Abu Dhabi-agreed price increases, so that the cost of oil would reach $U514.54 a barrel on April 1 rather than the fourth quarter of 1979, to a rise to $U517.50 a barrel called for by Iran. Under present arrangements, the price of Saudi Arabian light, the oil which is the basis for the O.P.E.C. structure, will go up to 5U513.84 from 5U513.34 a , barrel on April 1.

The O.P.E.C. meeting is consultative, and on Monday night Ministers still had not decided to convert the conference into an extraordinary session, a move which is required if prices are to be raised. But a number of Ministers said they expected this to happen on the second day of the meeting.

On Monday, the 13 O.P.E.C. members discussed the role of the oil companies in the present oil market tension and the problems caused for the developing world by higher oil prices. Gabon’s Energy Minister (Mr Edouard Mbouy-Boutzit) told reporters that the industrial countries were ready to pay higher prices for oil. It was the oil companies, not the producers, which were making profits.

Prices should rise to curb the profits of the oil companies, he said.