Oil shortages could bring war —Schmidt

Press, 5 June 1979, Page 8

Oil shortages could bring war —Schmidt

NZPA-Reuter New York

The West German Chancellor (Mr Helmut Schmidt) has said in an interview that competition for dwindling oil and natural gas supplies could lead to war.

In the current issue of “Time” magazine, Mr Schmidt said that “if nuclear energy is not developed fast enough, wars may become possible for the single reason of competition for oil and natural gas.

“And I think that the scarcity of oil and the rising prices for crude, which are a menace to the functioning of our economies, can lead to wars,” the Chancellor said.

Asked if he thought that force should be used to secure oil supplies for the West, Mr Schmidt said: “. . . I have to be quite frank in answering this one. I have deplored these utterances.”

Meanwhile, in Riyadh, the Saudi Oil Minister (Sheikh Ahmed Zaki Yamani) has said that Saudi Arabia, the world’s biggest oil exporter, is against imposing an oil embargo on Western countries.

At an Arab conference in Bagdad two months ago at which sanctions were imposed on Egypt over the signing of the peace treaty with Israel, Palestinian leaders backed by hardline Arab countries, called for an embargo on the

United States for helping to bring about the pact. Saudi Arabia then opposed the move. Sheikh Yamani has also said that Saudi Arabia will determine its stand on oil prices in consultation with other members of the Organisation of Petroleum Exporting Countries, due to meet in Geneva this month. Saudi Arabia is urging moderation in oil pricing. In London, Britons have been shocked by the news that two big distributors. Shell and Mobil, are to ration deliveries. Mobil will cut its deliveries to 85 per cent of 1978 levels and Shell to 95 per cent.

And commentators predicted that petrol prices

would soon pass $2 a gallon at the pump. .

The move came as a sequel to British Petroleum’s action in raising the price of crude oil from its Forties field in the North Sea by $2.45 a barrel. The new price of $20.70 a barrel represents a 48 per cent increase above the price which the partly State-owned company was charging for Forties oil in the last quarter of 1978. The Forties field produces more than half a million barrels of oil a day. It is high-quality light crude and the new price is just below the highest being charged in the world for that type of oil. British prices have gone up because Britain still has to import some heavy types of crude and companies try to spread the impact of shortages among their customers.

In Washington, the chairman of Standard Oil of Indiana has said that Americans will have to pay up to 50c a gallon more for petrol before the oil companies can afford to segrch for more domestic sources of oil.

Mr John Swearingen said American prices must rise to reflect a projected world level of SUS2S per barrel of crude oil if additional supplies are to be tapped. Petrol prices vary in the United States between 80c and 90c per gallon, and higher where there have been serious shortages.