World's slippery path to cheap oil

The likelihood of cheaper oil for the world has rich and poor nations wrestling with a basic question: Would lower oil prices be good - or bad?

At the moment, a number of conflicting answers reverberate in finance ministries, bank board rooms, oil company skyscrapers, and corporate headquarters.

No one yet knows how fast world oil prices may slide in the wake of OPEC's failure this week to set production quotas for its member states. Nor can it be said yet how steep a slide might be during a period of world oil glut and low demand.

The only point of agreement seems to be that a small drop in oil prices will bring a mixed bag of implications - and that a sharp fall will make the bag even more mixed.

''The key indicator to watch is the spot price, because it is the only public indication of what contract prices are doing under the table,'' says one OPEC source. Those prices have been falling, but not sharply, since OPEC's Geneva meeting.

Answers are made difficult to reach because some are concerned about the short term, and others about the long term:

* ''We want cheap oil,'' proclaims a headline in the respected British magazine the Economist. The weekly sees cheaper oil helping rich nations to fight inflation, to put idle factories back to work, to force banks into correcting unwise lending policies in recent years, and to raise living standards in non-OPEC countries.

* ''Cheap oil means less revenue for OPEC, less OPEC buying power from the richer nations, less grants and loans from OPEC to the developing world, and a reversion to the world of the 1960s, where the gap between 'have' and 'have-not' nations grows instead of diminishes,'' says Dr. Awni S. al-Ani of Iraq, assistant director general of the OPEC Fund for International Development in an interview here.

Adds a source at the Vienna headquarters of OPEC (Organization of Petroleum Exporting Countries):

''A sharp drop will also turn the United States and other countries away from working on wind, wave, solar, geothermal, and other non-oil energy sources. It will make the industrial world dependent on oil again, and leave it vulnerable to another surge in prices later on.''

One point of clarity is that finding answers is urgent for reasons that stretch far beyond the price of running a car or heating a home.

They include not only success in the fight against recession, the pace of future development across the ''have-not'' countries, oil company profits, and the cohesiveness of the world banking system, but other issues as well. For instance, whether the Soviet Union (the world's biggest producer and second-largest exporter of oil) can continue to benefit by selling its oil abroad at high prices.

Needed now, analysts in Vienna and London agree, is new insight and flexibility from diplomats, the oil world, and the global financial community alike in a period of uncertainty and apprehension.

What follows is a look at the basic question from the different points of view.

* Consumers in the US, Western Europe, and Japan:

Cheaper oil should mean lower gasoline prices and smaller home-heating bills, at least in the short term.

Governments, especially in Europe, will try to keep gasoline taxes high, however, because they need the revenue.

In Britain, for instance, a gallon of gasoline selling for $2.63 ($:1.7) contains taxes totaling almost $1.55 ($:1). At least two major oil companies now want to add at least $:0.6 to each gallon despite falling prices. They say they need to recoup past losses.

* Governments in these same countries:

Cheaper oil means smaller energy import bills. At a time of recession, that is a definite gain.

The Paris-based OECD (Organization for Economic Cooperation and Development) estimates that across its range of ''have'' member states, a 10 percent fall in oil prices might push general consumer prices down 1.5 percent over two years.

American Express's latest AMEX Bank Review, as cited here, says OECD net oil imports in 1981 were about $250 billion. If prices fall to $25 a barrel, the savings could be $55 billion, which amounts to about 0.7 percent of industrialized countries' gross national product. That is no small figure, when forecasts indicate that total GNP won't grow by more than 1.5 percent in 1983.

The Economist estimates that in 1980 the US spent $74 billion on imported oil , Japan $58 billion, West Germany $32 billion, France $27 billion, and Britain zero.

In all, 2 to 3 percent of gross world production shifted from Western consumers in each of the 1973 and 1979 oil price jumps, the weekly estimates. So potential savings for all but Britain are large. Unemployment, now above 10 million people in Western Europe alone, could be lowered.

Other analysts fear political instability could threaten the US if Mexico, an oil exporter which is not a member of OPEC, is thrown into financial trouble by a loss of oil revenue.

The Economist argument answers that the real danger in Mexico (and elsewhere) was pumping more loans into an overextended economy. (Recently, Mexico began to impose fiscal discipline recommended by the International Monetary Fund and other lenders.)

Britain is particularly sensitive to oil price changes, because it earns some expensive offshore oil has helped drive down the value of the pound in recent days.

But Prime Minister Margaret Thatcher, for one, insisted Jan. 25 that ''although the speed of change causes difficulty,'' cheaper oil ''is beneficial to world economies as a whole.''

The Economist says OPEC countries were earning a surplus of about $120 billion a year after the price hike of 1979. Last year, the surplus was wiped out - and a deficit will mean, the publication argues, a corresponding surplus for everyone else's balances.

That shift, the view is, will help rescue the industrial world from its slump in overall demand and put factories back to work.

One more argument from NATO countries in favor of cheaper oil: The Soviet Union earns much-needed foreign currency by selling oil at high prices. Lower the price and the Soviets may become more amenable to world economic pressure.

* Oil companies:

They stand to lose money as they sell off inventory stocks bought at high prices. They may have to curtail new exploration and slim down their staffs. Profits might fall.

Some analysts say oil companies have been earning such big profits for so long that these difficulties are not insuperable.

The companies reply that the world needs more exploration to make oil last longer. They themselves need profits to keep looking and to keep refining oil into gasoline and heating fuel. One estimate at the recent OPEC meeting in Geneva was that the four parent companies of Aramco in Saudi Arabia have been losing $13 million a day in recent months by paying the official OPEC price of $ 34 a barrel in a market where spot prices were as low as $26.

* The 13 OPEC members:

Confusion reigns. Eyes are fixed on Britain, whose North Sea light crude is the reference point for all non-OPEC oil. It competes with similar-quality Libyan and Nigerian oil.

Saudi Arabia's immediate strategy is said here to be to see whether Britain lowers its $33.50-a-barrel price, then to watch what other OPEC countries do.

The Saudi role as price leader, based on the largest-of-all OPEC output, is being challenged by Iran. Saudi output is down to less than 4.5 million barrels per day (b.p.d.) from about 10 million a year ago, while Iran's is now up to more than 3 million b.p.d. from about 1 million b.p.d.

Says one non-Arab OPEC source here:

''Oil stood at $18 a barrel when the revolution began against the Shah. Iran wants to stop the Saudis sending money to its enemy in the current war with Iraq.

''Never forget Iranian bitterness at this help. Iran may be prepared to see the world price return to $18 as vengeance against the Saudis.''

* The big banks:

They recycle OPEC dollars to developing countries - including OPEC members Venezuela, Nigeria, and others. All will find it harder to repay their loans. Some banks warn of a breakdown in the banking system.

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