Saudi Arabia and other oil-producing nations might lower production unless they are assured of a "reasonable return" to offset inflation, Saudi Oil Minister Ahmed Zaki Yamani said today.
Addressing the European Management Symposium, Yamani said the current rate of return on the investment of dollars earned by Saudi Arabia was "below zero" because of inflation.
In December Saudi Arabia produced an estimated 9.8 million barrels of oil daily about a third of the total produced by OPEC.
Yamani said Saudi Arabia has secondary oil fields whose development required large investments. But he said these investments would not be worthwhile without assurance of sufficient income from oil sales.
On other issues, Yamani took these stands:
The OPEC countries would have to adopt a basket of currencies.
The price of oil in "real" terms will rise on an annual basis through the 1980s. Although there may be a slight short-term drop in the near future because of an emerging oil glut.
The U.S. should do "something to correct" its freezing of the Iranian bank assets or it could make other Arab investors think twice about the safety of their investments.
It should come as "no surprise" if Saudi Arabia refuses to renew existing contracts, preferring instead oil-for-technology deals. He said, "Our oil will be sold not for the amount of dollars we get, but for other considerations such as technology, industry."
Alluding to Soviets' move into Afghanistan, Yamani said: "The heat is coming nearer the oil fields, and it is very dangerous to have heat near oil."