THE SO-CALLED oil glut is back. The glut means that the world is currently producing just a little more oil than, at the present staggering prices, people are buying. Stocks are up here in the United States, and some gasoline stations are open for more hours. How long will it last?
That's altogether unpredictable, which makes it dangerous. The world has been through these episodes before. The glut makes people -- and governments -- overconfident. They begin to think that the oil crisis has been solved, and there's a terrible temptation to slide back into those old careless habits.Then something happens, half a world away, and the gasoline lines are suddenly there to remind consumers of the realities of the oil supply.
The term "glut" is misleading, since it suggests vast and inexhaustible surplus. People should remember that this country's oil supplies -- both domestic production and imports -- are down from last year. The present comfortable sufficiency was created only because oil consumption is dropping even faster.
In the last glut, in 1977-78, some oil prices fell a little. Even at the gas pump, they didn't rise as fast as inflation. That isn't likely to happen this time. This administration is decontrolling oil prices and imposing an import fee. The price of unleaded gasoline is now close to $1.30 a gallon. When the import fee hits the filling stations in mid-May, that price will go up another dime. It's essential to deep down driving as the weather gets warmer and the vacation season arrives.
You will occasionally hear the argument that there's no point cutting American oil imports, because OPEC will only respond by similarly cutting its production. That line of logic misinterprets the whole experience of the 1970s. Some OPEC governments are already reducing production. But OPEC is not an organization with a central strategy, or the authority to enforce it. OPEC is a loose alliance of countries with very different interests, each country maneuvering to protect its own position. The two great surges of oil prices took place amidst the passions and confusions of, respectively, a war and a revolution. OPEC's future policy is not clear to us or, in most cases, to the OPEC countries. But one thing is obvious. Each successive decrease in oil consumption, here or anywhere else in the world, will make it harder for OPEC to raise prices. Each decrease will force more harshly the disputes within the OPEC over allocating the production cuts, and it will certainly diminish the impact of an embargo by any one country.
Over the past winter, Americans apparently used 8 percent less gasoline than they used a year earlier. That's 600,000 barrels a day saved. Heating oil was down similarly. Imports consequently were down 9 percent, which is some 800,000 barrels a day. By driving less, Americans are beginning to shift power away from the sellers of oil and toward the buyers.