Outside the Strait of Hormuz, the narrow mouth of the Persian Gulf, 110 tankers of various tonnages have been sitting at anchor waiting for the world to fix the price of oil.
At the other end of the Persian Gulf, an oil spill of between 40,000 and 80,000 barrels, growing by 2,000 barrels a day, is slowly spreading its ugly slick and drifting toward the Iranian coast. The runaway oil is the result of an Iraqi raid on an Iranian offshore field, and the danger of another attack has kept anyone from capping the leaking well.
The armada of waiting tankers and the widening spill bear testimony to uncertain times in the world's oil heartland--living in a state of economic suspended animation on the one hand and in the dark shadow of the 30-month-long Iranian-Iraqi war on the other.
No one seems able to stop the fighting or its hemorrhages, and whether anyone can halt the oil price war looming over the gulf seems just as questionable.
No buyer here is saying so openly, but there is good evidence that the name of the game these days is to try to force down prices by whipsawing the producers on the Iranian and Arabian sides of the gulf.
The game has been easy going, because Iran has been ready lately to sell its oil at just about any price--$26 a barrel to its ally Syria, for example, compared to the old official OPEC price of $34. By "leaking" the latest discount on Iranian crude, pressure is applied on brokers of gulf Arab oil.
No Japanese or western player in the high-stakes oil game here will for one second countenance the idea that the London agreement might be acceptable in the prevailing circumstances of the world market. They point to "spot" prices--for noncontract oil sold in single cargoes--as the "reasonable" level. These are currently $1 to $2.50 a barrel below the new OPEC price of $29.
"Nobody wants to buy at the official price anymore," a Japanese oilman said.
This is shorthand for saying that the buyers want market forces, not OPEC, to decide the rise and fall of world prices, and that the producers' cartel should bow to the will of its customers.
Western and Japanese oil sources here say that the buying and selling of the gulf's "black gold" has almost come to a complete stop these past two weeks, while the barons of the business fought it out in London over prices and production.
The Bahrain refinery, a 250,000- barrel-a-day operation, has on some recent days shut down completely because the products refined from a 42-gallon barrel of oil are selling for less than the $34 that the Saudis have been charging the Bahrainis for each barrel to process. Oilmen here say that Saudi Arabia's own refineries are caught in the same dilemma.
Japanese traders seem particularly bent on making the gulf's once all-powerful producers bow to market forces. This new boldness is significant because Japan now is getting 83 percent of its supplies from the gulf, according to calculations of the Japan National Oil Co. here, and can hardly afford to antagonize its producers on a long-term basis.
"We don't need to rush to buy oil right now," said one Japanese trader. "The attitude of oilmen in Japan is 'just wait and see'."
It is one more sign of the times that Japanese buyers are shying away from signing longterm contracts, even three-month ones, and switching instead to the noncontract, or "spot," market. Already, 20 to 30 percent of Japanese buying is being done on this basis, according to Japanese traders here.
Right now, Japan is bound by contract to purchase 330,000 barrels a day from Iran. But contracts for two-thirds of this amount expire at the end of March and when they do, Japanese traders intend to replace it with deals made on the spot market, according to gulf oil sources here.
In their scarcely concealed strategy of forcing down the gulf producers' prices, Japanese and western oil companies have been greatly aided these days by the bitter rivalry between Iran and Saudi Arabia and the former's declared aim of toppling the Saudi kingdom as OPEC's kingpin.
The Iranians have been both ruthless and astute in the pursuit of their gulf objectives. They have squeezed their battlefield enemy Iraq economically by using military force to keep its oil outlets on the gulf closed down. They also have stolen the customers of Iraq's Arab gulf financial backers by undercutting OPEC prices, thereby pinching the Iraqis' pocketbooks as well.
As a result, Iran's oil output has soared from less than 1 million barrels a day to 3 million and more over the past 18 months, while that of Saudi Arabia has plummeted from more than 10 million to less than 4 million.
The Iranian feat is particularly remarkable, analysts here note, because Iraqi warplanes repeatedly have pounded the main Iranian oil terminal on Khark Island in an effort to stop its exports. But Khark still functions, minus a few jetties.
Shipping profiteers, many of them Greek, run the risk of dashing with their small tankers to Khark, quickly filling up with the cheap crude and dashing southward again to the safety of the Gulf of Oman. There, they transfer the oil into the big tankers and go back for more.
This system is one reason, but only one, for the flotilla of tankers anchored in the Gulf of Oman. The principal reason has been the undecided price of oil and a secondary cause the high insurance rates due to the Iranian-Iraqi war.
Nobody here seems to expect any lowering of the war risks or insurance rates in the foreseeable future. And nobody expects the oil price war to end in London, either. So an atmosphere of anxiety hangs over the gulf, and no one here pretends to know how or when it will be lifted.