The Organization of Petroleum Exporting Countries will meet at a nearby beach hotel Tuesday amid speculation on whether its two largest producers, Saudi Arabia and Iran, can convince others to agree to a one-year freeze on oil prices.
Venezuelan Oil Minister Valentin Hernandez told reporters today, "We would need to be convinced about a freeze." He said he wanted to discuss Iran's "new position" of favoring the freeze with Iranian Oil Minister Mohammed Yeganeh.
Hernandez went on, however, to stress "OPEC unity" and he added that Venezuela is "not locked into a position."
At previous meetings, Iran and Venezuela often have shared common pricing positions, with Iran leading the "price hawks" that have pressed for increases. Saudi Arabia has led the "price doves."
A break between Iran and Saudi Arabia resulted in a pricing split at he OPEC meeting last January in Qatar. It was resolved in July when Saudi Arabia and the United Arab Emirates, who had joined the Saudis in holding the January price rise to 5 per cent, agreed to raise prices to the 10 per cent that Iran and 10 other cartel members had agreed to.
Last week, Saudi Oil Minister Sheikh Zaki Yamani said there is "no possibility" of a price increase at Caracas. The shah of Iran, in a November visit to Washington, told President Carter he would work for a freeze here.
Together, Saudi Arabia and Iran control half of OPEC's output. Other OPEC members, Iraq and Libya in addition to Venezuela, are arguing for a price increase because of the decline in the dollar's value, or, as Indonesian Oil Minister Mohammad Sadli said in Tehran last month, because "we need the money." Sadli said he wants a 10 per cent increase.
The Iraqis, as has been their custom, have called for the sharpest increase - 23 per cent. Venezuelan President Carlos Andres Perez said over the weekend that he would like a 5 per cent increase.
OPEC prices are now set at $12.70 for a 42-gallon barrel.
OPEC spokesman Hamid Zaheri said tonight at a press conference that the ministers will finish the meeting in two days, although he gave no indication of how the informal pricing decisions are going.
The conference is being held in the Melia Caribe, a $30 million hotel about an 80-minute drive from Caracas. It is ringed with an estimated 2,000 soldiers and militiamen.
More than 1,000 armed troops have been posted at the airport and at nearby staging areas, according to Venezuelan officials.
Soldiers are bivouacked in the hotel's underground parking lot. Tanks, a patrolboat in the Caribbean offshore and armed helicopters - used to whisk the oil ministers back and forth from the airport - are on call nearby.
The security is to prevent terrorist activity such as the 1975 assault and kidnaping at OPEC's Vienna meeting.