''The world oil situation is less predictable today than I ever remember having seen it. I can't remember another time when you'd ask me and I couldn't honestly tell you whether the price of oil would be up $10 or down $10 next year. I can conceive of situations fairly readily where it could go either way within the next year, or even within the next month or two.''
These words from Warren Davis, chief economist for Gulf Oil Corporation, point to an oil industry fact of life: Like the tip of an iceberg, the current slip in world prices sits atop a lot of unknowns.
US oil imports rose to more than 7 million barrels per day (bbl/d) in 1977. Then sharp price hikes, peaking at $40 a barrel last year, forced dramatic adjustments.
In line with last year's 6 percent drop in world oil production and 7 percent drop in demand, US oil imports are now down to 4.6 million bbl/d compared to the 6.8 million of one year ago.
Responding to reduced demand, the Middle East has cut back its oil production to slow the drop in oil prices. But oil is trading today on the spot (cash) market at $29 a barrel, $5 below the official Saudi Arabian standard for the Organization of Petroleum Exporting Countries.
To some energy experts, the oil-price plunge proves that the free market is working and that national economies, hit by recession, can begin breathing easier. In this view, the industrialized West will benefit if competition between Middle East oil producers and major new suppliers such as Mexico drives oil prices down to $20 a barrel or even lower by 1983.
To other experts, any apparent ''oil glut'' is a very temporary phenomenon that could turn into a serious shortage overnight. These experts warn that low prices and headlines about an oversupply of oil risk undermining the West's recent and vital commitments to:
* Increased oil exploration.
* Energy conservation.
* Development of alternate energy sources.
* Emergency stockpiling.
Lower oil prices are ''wonderful for the economy,'' says Edwin Rothschild, director of Energy Action, a consumer group concerned with energy policies. ''Any drop in oil prices reduces inflationary pressures and stimulates the economy,'' he adds, ''because both consumers and businesses pay less for energy and have more to spend on other things.''
On the other side of the issue, one key congressional aide to the House Energy Committee argues that Congress should focus on long-term energy policy objectives. The apparent oil glut is a ''passing phenomenon,'' the aide insists , which must not distract attention from the risk of ''major supply disruptions in the near future.''
Congress's determination to prepare for future emergencies is seen in the strong bipartisan support for new legislation giving the President power to allocate petroleum supplies in cases of severe shortages. President Reagan has threatened to veto the Standby Petroleum Allocation Act of 1982 on grounds that it would interfere with the free market. But proponents of the measure are lobbying hard.
The congressional aide says, ''We outlined the worst set of scenarios to White House staff, in which the Soviets move toward Iran and the Strait of Hormuz is closed to shipping, or an Islamic revolution topples the royal family of Saudi Arabia.''
George Mitchell, chairman of Mitchell Energy & Development Corporation, a leading independent oil producer, sees an urgent need for action to boost US domestic energy supplies. He argues that the sharp drop in US oil imports is primarily the result of recession, not of conservation efforts. Therefore, he expects that an economic upturn will cause US imports (crude oil and refined product) to rebound from 6 million bbl/d to 8 million -- leaving the US once again highly vulnerable to supply disruptions. His goal is to reduce imports to 2 million bbl/d.
World demand, Mr. Mitchell adds, has been forced further down ''because 2 million barrels a day are coming out of storage. Everybody has stored up oil all over the world the last two or three years, and now they're finding that with high interest rates they need to get rid of these expensive inventories.''
Once this stored supply has been drawn down, he warns, world oil prices could start climbing again.
The way to escape ''political blackmail by the Mideast,'' Mitchell says, is to ''increase outlays for exploration and production to $100 billion a year by the mid-1980s from the current level of about half that. At the same time, we should boost drilling from about 70,000 wells (in 1981) to a sustained rate of 100,000 per year.''
Mitchell says he believes that decontrol of natural gas and a phasing-out of the windfall profits tax on oil would provide oil companies with the revenues needed to expand drilling programs.
Oil industry analyst David Ullom, with Rotan Mosle, a major investment firm in Houston, also warns against concluding that the energy crisis is over and that low prices will continue. He estimates noncommunist oil production will drop to 44.6 million bbl/d for 1982, with demand dropping to 45.4 million.
While current storage should more than cover 1982's expected excess of demand over new production, Mr. Ullom predicts that ''we could go back to another shortage if we become complacent again. And even if we don't become complacent, a shortage can happen overnight.''
Gulf Oil economist Warren Davis agrees that a sudden turnaround is always a risk. It could take place, he says, simply due to changed expectations.
''All of a sudden, people decided oil stocks were enormous,'' Mr. Davis explains. ''Then the inertia in the system set in and even when world demand kept falling, it seemed we couldn't cut production back as fast as the demand was falling.'' The result today is that traders and refiners delay purchases, confident that supply is adequate and that prices will remain level or fall.
However, Davis adds, if Middle East developments threaten a serious disruption of oil production, ''all of a sudden, you'd find the same stocks that are too big now would suddenly seem inadequate . . . and I suspect you'd see people getting panicky and running around bidding wildly to buy crude again, driving prices up sharply.''
Economist Milton Russell, a senior fellow with Resources for the Future, explains that the drop in oil prices ''improves our international balance of payments and therefore the value of the dollar on the world market, it reduces the amount of our exports required to pay for our imports, and it is in effect a reduction in the taxes that all Americans have to pay to foreigners. Consequently reduced oil prices are certainly in the country's best interests.''
But Dr. Russell warns against allowing ''low prices to cause us to be less troubled by and therefore prepare less for disruption and perhaps abort efforts for conservation and alternate fuel development.'