Leading Persian Gulf Arab oil producers huddled for seven hours in Riyadh, Saudi Arabia today discussing a near-certain cut in their oil prices but postponed any action until Wednesday when Iraq and possibly Libya may join them.
Statements by ministers left unclear whether Saudi Arabia and its three OPEC gulf allies planned to lower prices on their own or call an emergency meeting of the Organization of Petroleum Exporting Countries to do so.
Ministers' comments before the meeting indicated that they were sharply divided over whether to decree their own unilateral price cut to match or undercut reductions during the past five days by Britain, Norway and Nigeria ranging from $3 to $5.50 for a 42-gallon barrel.
The gulf Arab producers clearly face a major dilemma, because a decision to sharply reduce their own base price without an OPEC agreement could well serve only to fuel the very price war that they are trying to halt.
Oil ministers of Saudi Arabia, Kuwait, the United Arab Emirates and Qatar met throughout the afternoon behind closed doors in Riyadh's Conference Palace but gave no indication after more than seven hours what they were deciding.
Emerging from the conference, Saudi Oil Minister Ahmed Zaki Yamani told reporters that no decisions would be taken before Wednesday when Iraq's minister, and possibly Libya's, would be present.
Another conference source was quoted by The Associated Press as saying Wednesday "could bring anything--more oil ministers arriving, some form of OPEC meeting, or a price cut."
The meeting in Riyadh is taking place in an atmosphere of general crisis in the world oil market, with Britain's North Sea oil reported to be selling today on the spot market in Rotterdam for as little as $27.55 a barrel.
This is nearly $3 less than the new reduced price that Britain set on Friday for its oil and $6.45 below the present OPEC benchmark price of $34.
Meanwhile, traders on the London oil futures market were reported to be speculating on a drop in the base price to $25 a barrel or even less.
In Moscow, the Soviet Communist Party newspaper Pravda said a price war could cause irreparable damage to OPEC and urged the group to stand firm against what it called western pressure to lower prices. The Soviet Union is the world's largest oil producer and earns badly needed foreign currency from sales to capitalist countries.
Before the opening of the meeting in Riyadh, Yamani issued a statement seeming to indicate Saudi Arabia was ready to enter a full-scale price war with Nigeria and other price-cutting OPEC members to force them into accepting a new set of prices also acceptable to the Arab Gulf producers.
"My country will take no more after today and will adopt the measures required to protect its wealth," he was quoted as saying by the Bahrain-based Gulf News Agency.
Saudi Arabia, the world's leading oil exporter and traditionally the swing producer within OPEC, has cut its production from 10 million barrels a day to about 4 million in less than two years in a major effort to defend the $34 base price.
The United Arab Emirates oil minister, Mana Said Oteiba, also seemed ready to carry out a price cut, although still eager to implement it through OPEC rather than as a unilateral step by the gulf Arab producers.
"We have to look for a new base price that should be agreed upon by all 13 OPEC members who will have to defend it and abide by it," he told the emirates news agency.
Qatar's oil minister, Abdul Aziz Thani, was even more explicit, telling the Saudi news agency "we have to cut prices to get out of the crisis" and saying he agreed with expectations of at least a $5 reduction in the base price.
But Kuwaiti Oil Minister Ali Khalifa was still insisting today that there would be no price cut by the Arab oil producers. He told a local newspaper that "we have no plans to cut prices of gulf crude oils."
The Arab gulf producers also seemed uncertain whether to continue trying to work with other OPEC members to reach an agreement on both prices and production quotas.
Algerian officials today said that another OPEC emergency meeting could be held as early as Thursday, and both Iran and Libya have been pressing for one as well.
But Oteiba and Khalifa have come out publicly against the holding of such a meeting until there is a likelihood of an agreement on both price and production.
While Oteiba hinted at the need for an OPEC agreement, he told the emirates news agency he did not favor a meeting now.
"We have had enough from the experience of the last two meetings," he said.
He was referring to the abortive OPEC emergency sessions held in Geneva last month and in Vienna in December to discuss fixing production quotas for each member and so-called differentials among the various qualities of oil produced by each country.
Thus, it was far from clear tonight what kind of consensus might emerge from the Riyadh meeting, whether a price war was about to begin in earnest or whether they would accept the Algerian, Libyan and Iranian calls for another OPEC emergency meeting.