Oil ministers of some of the world's leading petroleum-producing nations apparently will adjourn their price-setting conference without agreement on a common price for crude oil exports for 1980, the meeting's chairman said today.
Speaking before a late evening session that had been scheduled to end the frequently tense and disputatious three-day meeting of the Organization of Petroleum Exporting Countries, chairman Mena Sayed Oteiba, who is oil minister of the United Arab Emirates, said the 13 ministers "have agreed to disagree."
He added that it was not clear how many individual prices would be charged by the seven Arab, two African and two South American nations that along with Iran and Indonesia, make up OPEC.
A prediction of failure, also came from Saudi Arabia's oil minister, Sheik Ahmed Zaki Yamani, who told reporters after tonight's lengthy bargaining session ended: "In my opinion, there will be no agreement."
The ministers are due to make a final effort on Thursday morning, OPEC officials said.
Earlier, Oteiba had said OPEC could emerge from the conference "with a two-tier system or more than two tiers." He added that the ministers were no longer discussing individual price proposals but were "talking in more general terms."
The deadlock resulted from a continuing battle by Saudi Arabia to keep the total increase of prices for the first six months of 1980 below 20 percent and Libya's determination to drive prices well above that mark. Conference sources reported that Saudi Arabia refused to accept a "compromise" price of $26.40 offered by Libya.
Oteiba's announcement indicated that Saudi Arabia had also failed to force other oil producers to restrain prices and keep them in the range of $24 a barrel for the 31 million barrels a day that OPEC produces.
Going into the climactic formal session tonight, the immediate outlook was for a continuation of the $24 to $30 price levels set in the days immediately proceding the conference here. This range would mean a 25 to 30 percent increase in both the current average price for OPEC oil and for oil imported into the United States. Both average prices are now about $22, according to the U.S. Department of Energy.
An uncertain ending to the OPEC conference will have political, economic and financial effects carrying far beyond world oil markets, which are likely to remain in turmoil until exact new price levels are determined and applied on the basis of the decisions taken here.
The prices rises proposed in Caracas will contribute to the transfer next year of $300 billion to the 13 OPEC nations from both industrial and developing countries, creating large new foreign reserve surpluses in a half dozen OPEC countries and again testing the ability of the commercial banking system to recycle petroleum earnings.
The price increases will also add one percentage point to the industrialized world's rate of inflation and intensify expected declines in national growth rates and employment in Europe, the United States and Japan, according to estimates by senior U.S. economic managers.
The meeting has marked a splintering not only of OPEC's pricing system but also of political power within the organization.There has been a clear lessening of OPEC's role as a potential economic intermediary between the industrial world and developing nations.
Saudi Arabia, despite its position as OPEC's largest producer with current daily output of 9.5 million barrels, has been unable to reassert its once-dominant position in the cartel. The Saudis had announced they were determined to return OPEC to a single "brenchmark" price system with other producers allowed to charge limited "differentials" for higher-quality oil.
Instead, Yamani reportedly came under intense pressure in today's meeting to raise the $24 benchmark price that Saudi Arabia set four days before the conference began.
Libya has responded to the initial Saudi price move by setting the $30 price for its oil last Sunday. Other OPEC members grouped their proposals for new prices between the two extremes.
Delegates reported that the 13 ministers were able to establish little common ground at a morning bargaining session that extended through lunch, conducted without aides in a suite of the luxury hotel where the ministers are lodged.
Technical experts were brought into the afternoon discussion for a detailed review of the differences of the types of oil produced in OPEC and of the justifications given by producers, including Libya, Algeria and Nigeria, for wanting to continue the greatly expanded premiums they have charged consumers in recent months.
The arguments over differentials and surcharges appeared to hold the key for new OPEC price levels.
Tight market conditions created by stockpiling efforts by Western countries in anticipation of price rises here and continuing trouble in Iran allowed those three producers to break the $23.50 "ceiling" OPEC established at its July meeting and to push their prices at the beginning of November to a top of $26.24.
That rise left an $8.24 gap between the top price in OPEC and Saudi Arabia's "floor" price of $18. As recently as last January, that spread of differentials and surcharges was $1.48.
The steady installation of differentials and surcharges was helped drive up oil prices 57 percent in the first 11 months of 1979 and has produced the kind of "oil price shock" that Yamani believes undermines Western economies and ultimately harms oil producers and other developing countries as well.
OPEC's failure this year to maintain a unitary price system has enabled individual members to get as much for their oil as market conditions allow and does not appear to be a true sign of economic weakness for OPEC. But it has to put in doubt the cartel's political willingness and ability to implement a system of gradual annual price increases indexed to inflation and other international financial factors.