Saudi Arabian Oil Minister Ahmed Zaki Yamani today predicted a glut of oil on world markets and relatively small increases in prices by the Organization of Petroleum Exporting Countries for the next two years.
At his first public appearance since the OPEC meeting in Bali earlier this week, Yamani told the National Press Club in the Australian capital that "there won't be any sharp increases in oil prices in 1981."
Yamani listed two reasons for his confidence that oil prices would remain, relatively stable. He predicted that the Iranian-Iraqi war would end soon -- "by the end of the first quarter in 1981 at the latest" -- and that there would be a slump, even a recession, in Western world economies, which would slow demand for oil.
Yamani spoke confidently of the world's energy future, but issued a note of warning.
"I am concerned that what happened in 1974 might happen again: a short period of oversupply, and everybody will say we have no worries and stop plans for oil conservation and development of alternative energy sources," he said.
"We'll go back to our old habits, drive our automobiles as much as it pleases us, use as much energy in heating, cooling, etc., as we need and forget about coal, nuclear energy and other sources of energy.
"Then the crisis which will come later on will be a very serious one."
He predicted an oil surplus in 1981, after the end of the Iranian-Iraqi war when both countries would produce as much as they could to "pay for the war."
He said that the oil exporting and consumer nations would have to talk about this and possibly take action in 1982 to ensure that the drive toward conservation and alternative energy continues.
Yamani predicted that prices would rise about 10 percent in 1982, but considerably less next year. He said he believed that OPEC would keep its future price rises to a level based on inflation in the Western economies, the growth in Western gross national product and the effect of current fluctuations.
Yamani also said he strongly opposes any U.S. military base in Saudi Arabia. "If you have an American base in the [Persian] Gulf, you are definitely inviting the Russians to have a base nearby," he said."They don't need an invitation."
Yamani said that the Soviet Union might need gulf oil for its own consumption and would "definitely" want it for its allies in Eastern Europe.
"So, don't give them a justification," he said.