The Organization of Petroleum Exporting Countries meeting here today with growing indications that the cartel's two largest producers - Iran and Saudi Arabia - will succeed in freezing oil prices during 1978. Venezuelan President Carlos Andres Perez nonetheless made a public appeal for a price increase.
During his welcoming address, however, Perez acknowledged that the "present inclination" of the majority of OPEC members is for "freezing prices."
Perez repeated his call for a 5 to 8 per cent price increase, and he told OPEC ministers, that the revenue from increase should be used to pay debts incurred by Third World countries.
The countries supporting a freeze, led by Saudi Arabia, Iran and the United Arab Emirates, clearly appeared, however, to have the upper hand during today's meetings, which extended into evening. Venezuela, joined by Iraw, Libya, Algeria and Indonesia have advocated price increases ranging from 5 to 23 per cent.
Before the opening of the two-day session, OPEC President Khalifa Thani of Qatar told reporters that "we might freeze, we might increase prices, and we might delete oil prices from the agenda!"
An agreement to take prices off the agenda woudl in effect mean that OPEC would be freezing prices while providing the members of the cartel with an alternative to splitting ranks over prices as they did as a meeting last January in Doha, Qatar.
Thani, who is Qatar's oil minister, repeatedly stressed OPEC "solidarity," although it was clear from Perez's speech that there is a division over prices.
Perez framed his proposal with an appeal to ties between the Third World and OPEC, calling on the 13 member countries to resist the "strong qressure" from the leading industrialized countries. These comments were obviously aimed at the Saudis and Iranians who, beginning with Treasury Secretary W. Wichael Blumenthal's trip to the Middle East in October, have been urge dby several U.S. officials to freeze prices. President Carter and Secretary of State Cyrus Vance did so during Washington meetings with the shah of Iran and Saudi Foreign Minister Saud Faisal.
Before the ministers opened their afternoon session at a flag-decked conference room in a luxurious becachfront hotel outside of Caracas, one member of the front supporting a price freeze, United Arab Emirates Oil Minister Mans Otaiba, said he would continue to press for a freeze despite Perez's appeal.
Otaiba said his country favors a freeze "because we feel that the world economy has not recovered from past oil price increases."
Other justifications for freezing the price, he said, include: a nearly 2 million barrel a day oversupply in world markets and concern for the effect a price increase would have on the less-developed countries.
Otaiba said that, if the ministers do not approve a price increase to compensate for devaluation in the dollar in the last year, the producing countries would continue to lose about 20 cents for each barrel they produce.
Thani, Otaiba, and other ministers, however, said that they did not expect OPEC to switch from dollars to another method of payments at this conference.
Asked about perennial attempts to get OPEC members to agree to limit production when prices are "soft" because of over-supply, Otaiba said he favored organizing production to insure that supply matches demand.
"I will ask my friends who are heads of delegations to try to cut their production so supply matches demand," he said.
Otaiba summed up the views of those countries advocating a freeze with the comment. "This is a sacrifice to prove again that the OPEC countries are reasonable."