OPEC thinks that the price of oil ought to go up, and quite a lot. Before Americans begin castigating the cartel for its greed and burning various sheikhs and ayatollahs in effigy, they might usefully pause to reflect on one simple truth: It isn't OPEC that is pushing up the price of oil.
The price of oil is being pushed up by the buyers - Japanese, German, French and Americans - as they bid frantically against each other. The only government in the world still selling oil this week at the OPEC price of $14.55 a barrel is OPEC's linchpin, cautious and conservative Saudi Arabia. It's not only the Iranians and the North Africans who have reached for the moon. Mexican oil is $17 a barrel, and the Canadian export price is over $20. British and Norwegian oil from the North Sea goes for $21. Britian, Norway, Mexico and Canada don't belong to OPEC. They aren't part of any cartel. They are simply selling their oil for what it will bring. The price that it will bring has been rising for the past six months far faster than the OPEC rates.
It was Britian, after all, that started the leapfrogging of prices last winter. But Britian does not see any very good reason why it shoud sell its North Sea oil at less than the best bid. Since January, of course, it's been a succession of increases by OPEC and non-OPEC producers alike, testing to see how high they can go. They stll haven't reached the point at which the customers refuse to buy.
That's the point. The only realistic remedy lies in a controlled, disciplined refusal to keep buying more oil at steadily higher prices. As long as the industrial countries keep buying at any price to avoid gasoline lines, the exporting countries will keep shooting the prices upward. That game would eventually end in economic collapse. President Carter has gone to Tokyo to try to work out a common strategy with six other major industrial countries to avoid precisely that outcome.
The Tokyo meeting has got off to a bad start. The Europeans put forward a formula that slightly favors them, and the Americans responded sharply.They are beginning to look like seven men standing in a burning house, quarreling over who's to pay the fire insurance premium. The European proposal - a flat limit exports to the 1978 level - has the virtue of being clear and explicit. The United States wants a somewhat different formula, but is also pushing, at last, for similarly immediate, specific limits on each country's imports.
If the seven governments cannot come to a binding agreement to limit oil imports, at once, they will have invited the misfortunes that will certainly follow. If they can agree, they will have taken the one crucial step to stabilize world oil prices and to protect their own prosperity.