The Carter administration yesterday welcomed the Shah of Iran's pledge to work actively to hold down oil prices, but cautioned that the oil cartel might still raise them.
White House press secretary Jody Powell told reporters that the statement Wednesday night by Shah Mohammed Reza Pahlavi following two days of talks with President Carter "is an encouraging one and one that we appreciate and find welcome news."
Powell, speaking for Carter, noted that some of the 13 member nations of the Organization of Petroleum Exporting Countries (OPEC) have talked privately about a "very large" price increase.
"We ought not assume the difficult process here is complete," he said. The OPEC ministers meet Dec. 20 in Caracas, Venezuela, to discuss a proposed increase in the world price of oil, which is now $14.50 a barrel.
"The administration is not ready to say we are confident the line will be held," Powell said. "We hope it will be."
At a news conference before his departure Wednesday night the Shah said his talks with Carter had led him to change his mind on the oil price issue. At first, he said, Iran planned to be neutral at the OPEC meeting. But after talking to the President, he decided Iran would push for a price freeze for a yeaer.
His comments showed that he assumed Saudi Arabia would also opt for a freeze, but Saudi Foreign Minister Saud al-Faisal said on a "Face the Nation" (CBS, WTOP) telecast Oct. 23 that he thought "some price increase is justified." Some U.S. officials have said they expect the Saudis to seek a 5 to 7 per cent increase. Iraq, another OPEC member, has proposed a 23 per cent hike.
The Shah also warned that holding the oil price line would not solve the long-range energy problem of the industrialized world. "If you get what you want in 1978, what will you do in 1979 or later?" he asked, adding that industrial nations should use less oil and cooperate on a major international effort to develop alternative energy sources.
One source described the scene around the Carter-Pahlavi talks as "schizophrenic." Outside the White House, where pro-and anti-shah demonstrators clashed with each other and police, the atmosphere was hostile, while inside the feeling was "quite warm" hs said.
The shah came partly to size up the new President, who had clearly disturbed him with constant talk of human rights and proposals to cut U.S. arms sales, the source added.
When the shah left, he was expansive in praising Carter, saying he had developed a "great liking" for the President "as a man and as a leader with new ideas."
Carter, for his part, was "as lavish or more so" than any other President in his Tuseday night toast to the shah at a state dinner in the White House, U.S. and Iranian sources said.
"If there was ever a country which has blossomed forth under enlightened leadership, it would be the ancient empire of Persia, which is now the great country of Iran," Carter said of the shah's 36-year reign.
"We look upon Iran as a very stablizing force in the world at large," Carter also told the dinner guests. "We are bound together with unbreakable ties. Our military alliance is unshakable."
While Carter told the shah he could not guarantee him additional weapons sales without consulting Congress, he stressed U.S. support for a strong Iran and said Iran's security "is a matter of the highest priority for this country."
Sources said that shah, whose country is the largest single purchaser of U.S. arms and who still wants much more, was told, in effect, "Look, there is still $12 billion worth of military hardware in the pipeline, much of it not even built, that you have bought and will get in the next few years. So don't worry. You have our assurance of long-term support."