Eleven major oil producing countries reportedly have agreed to cancel a 5 per cent price increase scheduled for July. The move is seen as a victory for the policies of Saudi Arabia.

The decision, reported here today by the Middle East Economic Survey, an authoritative bulletin of oil affairs, appears likely to strengthen Saudi Arabia's position in talks later this month in Washington between Saudi Crown Prince Fahd and U.S. officials.

In the past, Saudi Arabia has linked its moderate oil pricing policies to expected political gestures from the United States, specifically in the area of U.S. pressure on Israel to make concessions in the Middle East peace negotiations.

The newsletter said the 11 countries, members of the Organization of Petroleum Exporting Countries, have made a "firm decision" to freeze prices at their present level. It said a formal announcement is to be made May 20. The move would rescind a 60 cent increase in the present price of $12.70 a barrel, equivalent to about 1.5 cents a gallon.

Saudi Arabia and the United Arab Emirates, who account for about one third of the world's oil exports, split with the other 11 members of OPEC in a rancorous meeting in December and refused to adopt a two-stage price increase of 10 per cent on Jan. 1 and 5 per cent on July 1. The two countries instead raised their prices only 5 per cent, and Saudi Arabia said it would boost its production to undercut the majority's higher price.

There was speculation today that Saudi Arabia, after the conciliatory move by the other 11 members to rescind the July increase, might raise its own prices slightly to narrow the present 5 per cent gap and to help restore OPEC unity.

The newsletter, which is well-informed about offficial thinking in Riyadh, said, however, that Saudi Arabia had given no commitment to do so.

While the 5 per cent spread remains in effect, the newsletter said, future Saudi Arabia policy on oil prices will be influenced by the world economic situation including the North-South dialogue and by the outcome of crucial talks with the Carter administration on the Arab-Israeli problem and on Saudi-U.S. relations.

The latest development will be seen as a gain for Saudi Arabia in the running of OPEC affairs. Saudi Arabia's rulers reportedly felt challenged by the shah of Iran's attempt to put through larger price increases without prior consultation with Saudi Arabia.

Faced with Saudi determination, the newsletter said, Iran "reluctantly" and Iraq "very reluctantly" recognized they had to go along with dropping the planned increase. Iran and Iraq have been the main OPEC price hawks.

Venezuelan President Carlos Andres Perez, who toured Midlddle East and African oil states in late April and early this month, was credited by the newsletter with helping arrange the compromise. Earlier, there had been reports that Perez was unsuccessful in efforts to bring the two factions in OPEC closer together.

The newsletter said the OPEC majority favoring a July price increase broke when Venezuela, Kuwait and Qatar decided that a further price split with Saudi Arabia would be too damaging politically and economically, particularly in veiw of likely further increases in Saudi Arabian crude output.

After initial difficulties in boosting production, Saudi Arabia topped 9 million barrels a day last month, and Iran's oil production dropped by nearly 1 million barrels a day.

The latest decision by the 11 OPEC members was directed primarily toward dissuading Saudi Arabia from increasing its production further toward its 12 million barrels a day capacity and flooding the market with its cheaper oil.

A spokesman for Mobil Oil Corp. said, "If the report in the Middle East Economic Survey is accurate, it is certainly good news for consumers around the world."

The 11 countries produce about 20 million barrels a day so the saving to oil buyers for the second half of this year would be more than $2 billion.

A spokesman for Standard Oil Co. of California said: "We certainly think it is a wise decision."

Going through with the increase, the spokesman said, "conceivably would have a dampening effect on the industrialized worlds recovery from the recession and an even more serious impact on those developing nations which already are hard pressed to pay for their oil imports.