The world's major oil exporting countries expressed their determination today to raise oil prices by the largest amount since they were quadrupled during the 1973 Arab oil embargo.
The oil ministers of the 13-nation Organization of Petroleum Exporting Countries opened a price-setting conference here to decide where to peg the price of crude oil in a range from about $18 to more than $20 a barrel.
The head of one of the major delegations said Saudi Arabia advocated $17 to $18 a barrel, that Iran favored $22 to $23 and that he expected a compromise to be struck at about $20.
It is likely to be the largest single jump in OPEC's official price, now set at $14.55 for the "benchmark," Saudi Arabia's highly prized Arab light crude.
The last time such large increases were discussed was in late 1973, when the prices jumped in several stages from $3.01 a barrel in early October to $10.95 on Dec. 31.
Despite Saudi maintenance of the current OPEC official price to date, most oil sold by the cartel has in fact been selling at about $18 a barrel in a scrambled price structure loaded with a variety of price extras that take a barrel as high as $26.80 for Ecuadoran oil.
A major stated goal of Saudi Arabia, the world's leading exporter, is to restore price unity as a way of resuming the cartel's control over the chaotic international oil market.
Saudi Oil Minister Sheik Zaki Yamani said as he sat down at the start of today's meeting, "We will not accept anything abnormal."
Asked by reporters whether $20 is abnormal, he hesitated and nodded yes. Asked if $19 is abnormal, he laughed and closed off the line of questioning as the reporters were shooed out of the conference room for the real haggling to start behind closed doors.
Whatever price is set, one thing is certain: The price increases represent a major setback for the industrialized West.
Senior U.S. officials have been preparing analyses based on the assumption that OPEC would raise prices to $20 or more.
Internal Carter administration projections are that an increase of that level would cut sharply the expected growth rate of the leading industrial countries as a group by more than one-six - from 2.8 percent this year to 2.2 percent.
As for the United States, the administration forecasts that a $20 oil would force a cut in U.S. growth of more than a quarter - from 2.0 percent to 1.4 per cent for 1979.
During a pre-meeting interview, United Arab Emirates Oil Minister Sheik Mani Saeed Otaiba said, "The recession is coming. If it doesn't come in a year, it will come in two or three years."
Last evening, Kuwaiti Oil Minister Sheik Ali Khalifa Sabah said his country, also one of the leading Persian Gulf producers, would not accept less than $20 a barrel.
At the opening of this morning's meeting at the heavily guarded Intercontinental Hotel, Sabah and Yamani, who represent the two sides of the argument over prices, walked arm-in-arm into the conference. Splitting the differences between these two key exporters is the direction the cartel is most likely to take in any accord on a unified price.
Venezuelan Oil Minister Humberto Calderon-Berti said minutes before the conference started, "It is possible to find some way out under $20."
Agreement on a price below $20 is "impossible," said Kuwait's Sabah.
Gabon, which is not a major influence in OPEC, seemed to epitomize the position of most of the smaller revenue-hungry exporters. Gabonese Oil Minister Eduoard Alexis M'Bouy Boutzit, said, "We want both a high price and a unified price. W will try for both."
Yesterday, Otaiba, who also is OPEC's president, warned that if necessary the United Arab Emirates and Saudi Arabia could split with other members, creating two different price regimes within the cartel.
The OPEC ministers said they devoted their formal sessions to agreeing to provide an additional $800 million to the OPEC Special Fund to help developing countries. As much time in the day was devoted to private huddling during long breaks, during which the price of oil was the dominant theme. No official decision about prices is expected before Wednesday.
Most delegations here, however, seem intent on restoring a unified price level, narrowing the differences in prices between Saudi Arabia's $14.55 and the $20 or more imposed by four other OPEC members.
Even if OPEC does agree on a new unified price hike for "benchmark" Saudi oil, it would not necessarily preclude some of the exporters from again raising their so-called quality and transportation differentials - in effect surcharges levied on top of the official price. The Saudis hope to reduce those differences to the relatively small proportions that prevailed before the Iranian revolution.
Some of OPEC's most influential members have been expressing anxiety and that they could go too far for the economies of the major Western industrial nations, whose leaders are meeting in seven-nation summit conference in Tokyo this week.
Apparently addressing himself to those concerns OPEC president Otaiba said in an opening statement to the press this morning, "We hope to come out with resolutions which will be appreciated by the outside world. We are opening our hands and hearts to have good relations with the outside world."
Yamani, however, seemed very relaxed and self-confident. Asked why he was fingering his worry beads, he said, "Why should I be worried? Is there anything to worry about. I always have worry beads - so I won't worry."