Middle East states are keeping a careful watch for possible financial and political fallout from OPEC's reduced oil production. The decline of oil prices, and of the power and prestige of the Organization of Petroleum Exporting Countries, have already had a profound economic and political impact on the region.
If OPEC fails in its bid to halt the fall in prices by cutting production, and prices collapse, the result could be devastating for some Arab states as well as for OPEC members Nigeria and Indonesia.
In addition to the internal problems caused by the decline in prices are the external political effects of OPEC's decline.
Some analysts are predicting the collapse of the cartel altogether. But OPEC hopes that as a Western economic recovery continues, demand for oil - OPEC oil, in particular - will rebound. The OPEC nations are still sitting on the world's largest proven reserves.
Perhaps the state most worried about a continued price slide is Saudi Arabia, the wealthiest oil producer. The Saudi influence on Middle East politics hinges on the money that the Saudis can distribute. That money, though still available, is now available in less generous amounts.
The budgets of Jordan, Syria, and Egypt have already been affected by the misfortunes of the Saudis and Kuwaitis. Jordan, for example, received only about half the aid from the oil states in 1983 than it had in 1982, a decline from $1. 2 billion to $670 million.
There also are fewer jobs for Egyptian, Jordanian, and West Bank laborers in Persian Gulf states because less oil is being produced.
''OPEC is going to suffer just as the oil-consuming nations suffered 10 years ago when prices shot up,'' an oil analyst says.
Last week OPEC members meeting in an emergency session in Geneva agreed to cut production immediately from about 17.5 million barrels a day to about 16 million.
The action came in the wake of price cuts by Britain, Norway, and Nigeria, which brought the crude of those three nations well under the benchmark price of
The announced production cut is modest, but many analysts are skeptical about OPEC's ability to make even that stick.
The various OPEC members, as Saudi Oil Minister Sheikh Ahmad Zaki Yamani said after the Geneva meeting, may now ''realize that it's not a joke,'' and hold to the production quotas. But it seems likely that there are enough non-OPEC suppliers producing enough crude to keep prices stable in the short term or even force them to drop somewhat lower, according to analysts.
That's good news for oil-consuming nations like the United States, Japan, and Western Europe. But it could be bad news for the Western banks that have large, outstanding loans to oil-producing states. Those banks could be jeopardized should the price fall too low.
The Middle East has grown used to the revenues flowing from oil production. The decline in those revenues has had the sort of shocking impact that the sharp rise in prices 11 years ago had on consuming states.
Governments in oil-producing states are finding it almost impossible to cut their budgets to reflect the steady decline in revenues. As a result, deficits are piling up.
In Saudi Arabia, for example, oil revenues have fallen from well over $100 billion in 1980-81 to just $44 billion in 1983. At the same time, the Saudis spent some $85 billion to import goods and services in 1983.
''It was the fundamental error everyone made 10 years ago when they were predicting the increase of OPEC power,'' says Prof. Eliyahu Kanovsky, a senior researcher at the Shiloah Center for Middle Eastern Studies at Tel Aviv University.
''The assumption was that these (OPEC) countries would not have the ability to spend all that money they were earning. But whenever Saudi Arabia or any country gets more money, it increases its spending accordingly.''
Mr. Kanovsky, who is writing a book on Middle East oil, said the Saudis ''have been trying to curb spending for the last two years'' but instead have increased their budgets.
He argues that the Saudis face too many internal political pressures to cut their budget by any significant amount without putting the regime at risk.
Figures recently released by the Saudis showed a projected government spending increase for fiscal 1984-'85 of some 25 percent.
The pressure for Saudi Arabia and other OPEC states to sell on the spot markets for less than the official OPEC price will continue to be tremendous, Kanovsky says.