What Saudis soon may tell Carter on oil
The white-robed petro-sheikhs of Saudi Arabia may be drafting an angry oilgram to President Carter that goes something like this: "HAVE HAD ENOUGH YOUR MIDEAST POLICY STOPm ENOUGH CAMPAIGN PROMISES FOR ISRAEL STOPm ENOUGH PALESTINIAN AUTONOMY TALKS LEADING NOWHERE STOPm SEE HOW YOU LIKE THIS: WE NOW PLAN TO HIKE WORLD OIL PRICES, TRIM OIL SUPPLY."
Some experts feel such a message could turn up in the Oval Office as early as Sept. 15 and 16, when a chaotic Organization of Petroleum Exporting Countries (OPEC) convenes a regular strategy session in Vienna. More cautious observers expect the Saudi move within the next month or two.
The Saudis still seem unlikely to abandon the West altogether, to back a repeat of the 1973 Arab oil embargo and irreparably batter a world economic order in which they are opulent partners. Yet nor, it appears, are they prepared to wait forever for United States delivery on key Arab negotiating demands.
There are excellent economic reasons for the world's No. 1 oil exporter -- and America's No. 1 foreign supplier -- to slow the pumps and up the price tags.
Wordl markets were tight as a standard 42-gallon oil drum at the height of Iran's revolution. But with economic recession and improved conservation in the West, the world now seems agush with excess crude. Much of it comes from the Saudis, who produce most of OPEC's output and charge the least.
OPEC, meanwhile, badly needs rebuilding. The pricing free-for-all of the past two years has left it more circus than cartel. Hard-liners charge as much as $37 a barrel. The official OPEC minimum, legacy of a seller's market, is $32 . The Saudis charge $28, and got into the habit of pumping 1 million barrels a day above their normal 8.5 million to help out the West during the Iranian crisis.
As petro-experts see things, the Saudis can now barter a together pricing and supply line inside OPEC for more restraint and pricing "unity" among the marketplace hawks.
But there is reason to believe Saudi displeasure over US "peace" policy, rather than economic pressures, lies behind the expected shift on oil. For one thing, OPEC, after Iran, will probably never be the same.
There is no guarantee a Saudi deal to "reunify" OPEC pricing would survive the next world shortfall of oil supplies. The slack market, not a change of heart, is what makes the OPEC price hawks more open to Saudi reasoning nowadays.
For another thing, even a reunified OPEC under the "moderate" Saudis may not be as nice for the West as it sounds. Saudi Arabia's Harvard-educated oil minister, Sheikh Ahmad Zaki Yamani, argues he has a strategy to spare the industrialized world the jolt of sudden, sharp oil price hikes. Instead, he says, OPEC should settle on regular, more gradual increases.
That might be good news when the oil market is tight. But when the market is slack, would prices then still go up? A lot of Western industry guzzles oil. So do a lot of Western people, especially road-happy Americans. The Saudi plan might simply trade economic jolts for institutional inflation.
But finally, there seems to be an urgent need for political explanations for the expected Saudi oil moves.
Rigidly Islamic, acidly anticommunist, economically wedded to the West, jittery over potential internal unrest, the Saudi Arabian regime has long seemed an island of moderation in a turbulent Middle East.
When President Carter sparked a firestorm of Arab ire with the September 1978 Camp David accords -- envisaging mere Palestinian "autonomy" and a separate Egyptians-Israeli peace, instead of full Palestinian self-determination in an overall peace -- the Saudis chose their words carefully.
Camp David, said a terse official statement, was unacceptable as a "final" peace settlement. The message: We'll give Washington time to deliver.
Even after the separate Egypt-Israel peace was signed in the spring of 1979, even after the start and deadlock of Palestinian autonomy talks, Saudi Crown Prince Fahd let it be known that if Israel really showed willingness to meet Arab negotiating demands, Saudi Arabia "would do its utmost to cooperate and work for a full settlement."
The Israelis spurned the offer, and proceeded to tighten their hold on formerly Arab east Jerusalem, holy to Muslims as well as Jews. Israeli settlement of occupied Arab land continued. The Carter administration's response, in Arab eyes: some pro-forma protests,quickly followed by a sprint among the three top US presidential candidates for the Jewish vote.
Little surprise, Arab diplomats argued, that Prince Fahd rolled back on his peace platform and asked (rhetorically) whether anyone might blame the Arab world for turning to an Islamic holy war instead.
Even Arab commentators privately soft-pedaled that suggestion, summoning up odds visions of recruitment posters blaring: "Prophet Mohammad wants you!" Oil is viewed locally as a more realistic weapon in the battle against Israel.
"We want peace," Prince Fahd elaborated to Arab interior ministers recently. "We do not want to create problems in the world. But if forced to create problems, we shall . . . in order to defend our Muslim faith and our lawful rights."
