With a continuing global oil glut likely through the rest of this year. Saudi Arabia is under mounting pressure at home and from other producers to cut back substantially on its high level of exports, now topping 10 million barrels a day.

But the kingdom is not rushing. Instead, it appears to be husbanding its additional leverage over the world makret for some hard bargaining with its recalcitrant fellow oil producers to force them into finally adopting a Saudi plan for a long-range pricing strategy.

The Saudi objective is to establish a formula for regular price rises pegged to world inflation and Western economic growth rates. This could slow the price spiral and end the day-to-day uncertainty surrounding the cost of the vital energy source.

With its current daily production of 10.3 million barrels, the kingdom is producing about 40 percent of the total coming from the 13-nation Organization of Petroleum Exporting Countries (OPEC), thus giving it enormous leverage.

Reports of imminent sweeping cuts in Saudi and other oil producers production, stirred by a secret meeting held in Geneva in mid-February by six of them, have not proven true. [Kuwaiti Oil Minister Sheik Khalifa Sabah Wednesday denied the reports, one of which spoke of a 2.5 million-barrel OPEC cutback, Reuter reported from Bahrain.]

Still, across the Arab world, and particularly in Saudi Arabia, the issue today is who is going to cut back, by how much and when, to stave off a collapse in oil prices.

The Saudi oil minister, Sheik Ahmed Zaki Yamani, set Western oil circles abuzz with an unusually frank talk before the University of Petroleum and Minerals in Dahran six weeks ago by suggesting publicly for the first time the possibility of a drastic Saudi drop in production, albeit under very special conditions.

"When Iran and Iraq will be producing 7 million barrels a day and when the Opecy share of the oil market falls to below 24 million barrels a day, the kingdom will have to drop production to no less or more than 5 million barrels a day," he said.

Many analysts are projecting such a dip in OPEC's share, probably this year. But the likelihood of the two warring countries reaching 7 million barrels of daily production in the foreseeable future seems slim. Just before the war broke out last September, the two together were exporting around 3.7 million barrels a day, Iraq accounting for most of this.

Yamani's mention of such a dramatic Saudi drop -- which few oil experts are taking as indicative of true Saudi intentions -- was almost certainly calculated primarily to appease his special audience: Saudi Aramco workers and students, many of whom were openly critical of the kingdom's extraordinary high production level for the sake of a seemingly ungrateful West.

But it was more than likely meant as well to signal other OPEC members who have been resisting Yamani's long-term scheme to regulate the semiannual hikes in oil prices. The gist of Yamani's comments was that the only country financially able to reduce its production enough to keep the supply-and-demand balance in the producers' favor is Saudi Arabia.

"If the OPEC share of the world market continues to decline as was predicted by neutral sources to below 22 million barrels a day, shall we ask Iran and Iraq, as they are coming out of a destructive conflict and where they will need to rebuild, to reduce their production?" asked Yamani.

"Shall we ask Algeria and Nigeria and Indonesia, countries which need every dollar that they can get for their development, to reduce their production?"

No, he replied, "the burden will be upon us to go down."

Right now, Western Oil analysts do not expect more than a small Saudi cut in production before the next semiannual OPEC meeting scheduled for May 25 in Geneva.

[Associated Press quoted European sources in Rome yesterday as saying Saudi Arabia plans to reduce production by 500,000 barrels per day.]

But there are also growing pressures at home, to which Yamani was responding in Dahran, for a substantial cut soon in production. Many of his questioners pressed him on this point.

The kingdom is presently adding to its $125 billion reserves at a rate of $2 billion a month, despite its $75 billion budget this year and a $375 billion five-year development plan.

Just how much oil the kingdom needs to produce to meet its budget and plan is a subject of some discussion. But retiring U.S. Ambassador John West said in an interview in Jeddah in January that the Saudis were presently producing "double the amount of oil they need for their own national economy. If they cut their production to 4.5 million barrels a day they could generate all the money they need for their five-year plan."

Some Saudi sources say the minimum level is closer to 5.5 million barrels, but the estimate drops with each price increase.

Hisham Nazer, the minister of planning and author of three Saudi development plans, remarked in a recent interview that when he was making his calculations for the current one, the price of Saudi oil was $18. Now the price of benchmark Saudi light crude, the world's cheapest, is $32.

Yamani gave the questioning students a spirited defense of the Saudi effort to hold down price rises, arguing that they were accelerting the search in the West for alternative energy sources. If this continued, he warned, it would only take seven to 10 years before the demand even for low-cost Saudi oil would not be enough to finance Saudi development needs.

The minister noted that the kingdom's national interest did not coincide with that of many other producers regarding ever higher price. Countries with small reserves, he told the students, had nothing to lose and everything to gain from escalating prices so as to maximize profits while their oil lasted.

"The interest of the kingdom is that we extend the life of oil to the largest extent possible to allow us to build our economy in the most diversified manner, including industry and agriculture," he said.

"If we don't do that," he said, "we will reach a time when there will be a violent shakeup in our country.