Oil price controls dropped

Press, 2 November 1985, Page 11

Oil price controls dropped

NZPA-Reuter Abu Dhabi The Oil Minister of the United Arab Emirates, Sheikh Mana Said Oteiba, said yesterday that each member of O.P.E.C. was now free to sell its oil at any price it wished. The Organisation of Petroleum Exporting Countries, has fixed prices at which its members, now numbering 13, were supposed to sell their crude oil since it took control of the world market during the 1973 Arab oil embargo against the West. Some charged more when oil was in short supply and there has been discounting, against cartel rules, since a glut took hold a few years ago. Sheikh Oteiba, chairman of O.P.E.C.’s market monitoring committee, said nonmembers of 0.P.E.C., which have been raising their production, had failed to cooperate with O.P.E.C. in trying to defend prices. In spite of O.P.E.C. contacts with non-O.P.E.C. producers, “they did not understand us and did not cooperate with us. They were looking at the matter from a short-term and selfish point of view,” he said. Members of O.P.E.C. had suffered as a result of sharply reducing their production to defend the price

structure but that had not worked. “As from now, we are relieved from any commitments we accepted before and the sacrifices we made because non-O.P.E.C. producers were benefiting from our sacrifices," Sheikh Oteiba said. Just this week the “Sunday Tribune” newspaper in Nigeria, a cartel member, said in an editorial that O.P.E.C. “is now becoming absolutely irrelevant.”that O.P.E.C. “has fought over the years.” Meanwhile in London recently the United States Energy Secretary, Mr John Herrington, said that the United States opposed fixing of oil prices and so did not favour dialogue with O.P.E.C. The announcement could lower prices from the official JUS2B ($48.10) a barrel minimum, but would have an even more profound empact on the market if it called into question the willingness of the United Arab Emirates or other O.P.E.C. members to maintain their production quotas. Some oil company officials said, however, that Sheikh Oteiba’s statement was unlikely to have an impact because few countries were adhering to the cartel’s official price anyway.