Ministers of the world's leading oil exporting nations disagreed in Geneva on Saturday night (17 June) on whether or not to increase oil prices this year.
Ministers of the world's leading oil exporting nations disagreed in Geneva on Saturday night (17 June) on whether or not to increase oil prices this year. The delegates at the Organisation of Petroleum Exporting Countries conference in Geneva, Switzerland, decided to meet again on Sunday and Monday (18 and 19 June) to try and resolve their differences.
SYNOPSIS: The price of a barrel of crude oil has remained at 12 United States dollars and 20 cents (GBP7 sterling) since January 1977, when the 13 OPEC members raised prices by 10 cents.
The price has remained stable through the last three semi-annual meetings and early indications from this session were that it would stay unchanged. But members are divided into two camps on the issue. Saudi Arabia, the world's largest producer, argues that the continuing world oil glut and low level of economic activity make it impossible to raise prices now. Iram supports this position.
The Libyan Jamahiriyah, Venezuela, Kuwait, Algeria, Nigeria and Iraq argue that OPEC members need a price rise to make up for the falling value of the dollar and consequent erosion of their purchasing power.
OPEC economic experts estimate that recent world inflation and the dollar's weakness have reduced the real value of their oil revenues to the level of late 1973, when OPEC quintupled the price of oil. There is also a move, led by Libya, to change the system of calculating oil prices, basing it on a range of currencies, rather than the dollar alone. A fall in the dollar's value would then be matched by a corresponding price rise. Saudi Arabia opposes this. But the major issue yet to be resolved is the pricing itself.