UPPOSE IRAN's oil production this winter stays below the levels to which its customers are accustomed. Suppose, worse, that the present anarchy continues, and exports remain at zero. What would be the effect on the United States, Europe na dJapan? There's no point in trying to predict what's going to happen in Iran. But it would be foolish not to begin thinking about the consequences of a prolonged collapse of oil production there.
A great deal would depend upon the response of the other OPEC countries-above all, Saudi Arabia. Over the past two months, since the Iranian oil-field strikes begab, the Saudis have raised their production several million barrels a day. That has covered most, but not all, of the Iranian shortfall. It appears that the Saudis are prepared to avert any real shortage of oil in the industrial world, and the economic crisis that it would threaten. But they are not averse to a hint of scarcity in the world's oil markets. The Saudis are, of course, the only country with the capacity to raise or lower their daily sales of oil by millions of barrels on short notice. That is the reason for their enormous power over pricing.
The Saudis' intentions in the coming months are unknown. If they continue to produce at the present level-something over 10 million barrels a day, compared with 7 million barrels a day last summer-the industrial world will get through the winter without much trouble. But if they choose a lower rate, an unpleasant stringency could develop by late February .
Another large question is the weather. So far, in this country, it's been a warm winter. A could spell, here or in Europe, could send oil consumption soaring. But, again the effects would probably not be felt until late winter. Oil travels slowly, and any Middle Eastern oil to be used in this country before Februarey is already in tankers and at sea.
But getting through the winter is only the beginning. If Iranian production remains low, one result will be a worldwide pressure on prices to go higher. The Iranian disruptions in the past autumn were the main reason for OPEC's decision to impose higher prices net year than most people had expected. If Iranian shipments are low and irregular, the same thing is very likely to happen again next year.
Over the coming year, the basic policy of the Iranian government may well change. It's been customary in the West to argue that Iran has to produce oil at the absolute maximum rate possible to pay for its economic development. But the shah's style of economic development has included inordinately large expenditures on arms, and some of those contracts are already being cancelled. The shah's opposition charges that forcing the pace of development is inherently wasteful. If the country decides to move more slowly, the need for oil revenues will drop substantially.
Oil is never separate from Iran's other national purposes. A wave of resentment of foreigners is running through the country, and the government may decide to end its reliance on foreign engineers and contractors in the oil fields. The Iranian fields have been in production for many years, and keeping prodution up is becoming steadily more expensive and technically difficult. When the present upheaval began, Iran was going into elaborate programs of injecting gas down into the reservoirs to force the oil up. It's the kind of operation that requires a lot of highly specialized technical skill.That's another reason for the oil-importing countries to prepare for the possibility that Iranian production may never again reach the volumes of early last fall.
The industrial countries are not without the means to protect themselves. First, they can take conservation a little more seriously. Beyond that, in the months ahead, there is a job for the diplomats. Governments have to avoid doing panicky things that would turn a mild shortfall into a major disruption. They have to avoid hoarding, and snatching at each others' supplies. In the aftermath of the embargo five years ago, the industrial countries set up agreements to share oil in emergencies. Shortly the world may see whether those agreements are in working order.