Testy OPEC Ministers Confront Price Issues at Emergency Meeting

With nerves obviously frayed, ministers of the Organization of Petroleum Exporting Countries opened an emergency meeting here Monday, reportedly narrowing differences on some issues but falling far short of reaching an agreement on a price for oil.

Many outsiders predict that the realities of the market will force the once-powerful cartel to cut the price of its oil, but OPEC spokesmen insisted to skeptical journalists that the ministers had not even discussed that matter yet.

Instead, it was reported that they had argued Monday about the differences in price they should charge between one quality of oil and another.

One of the most controversial ministers, Nigeria’s Tam David-West, professed optimism about the chances for agreement today on most issues. “It is essential that the world take us seriously,” he said after the meeting ended for the day. “We must be realistic.”

Yet David-West had been a central figure in an acrimonious moment earlier in the day when Mana Said Oteiba, oil minister of the United Arab Emirates, rushed out of the meeting in anger only an hour after it began.

Talking with journalists, Oteiba accused David-West of “stabbing OPEC in the back” and Nigeria of undermining the OPEC oil price by producing more oil than it was supposed to under cartel agreements.

Misunderstanding Claimed

Later, obviously trying to patch things up, at least to some extent, Ahmed Zaki Yamani, Saudi Arabia’s oil minister, told journalists packed around him in front of Geneva’s Inter-Continental Hotel that the whole problem was a misunderstanding, that Oteiba had misunderstood something that David-West had said in English.

“Our Nigerian friend is very well educated,” Yamani said. “He speaks a very special English.” David-West, standing at his side, laughed heartily.

In their arguments about price differentials, the OPEC ministers focused on one of their most complex issues.

At present, the official OPEC price for oil is usually described as $29 a barrel. That price, however, is only for Saudi Arabian Light crude oil, which is regarded as a benchmark price used as a basis on which to calculate all other OPEC oil prices.

Heavy crude oil is officially sold at $2.50 less than the benchmark, while the lightest oil, like that of Nigeria, is officially supposed to be sold at $1.50 more.

The trouble for OPEC is that consumers have found the lower price for heavy crude so attractive that they are rejecting the higher-priced light oil. Nigeria has demanded that the differential between its lightest oil and the heavy crude be cut from its present spread of $4.

Two Proposals Weighed

After the Monday sessions, Indonesian Oil Minister Subroto, the president of OPEC, reported that the ministers were considering two main proposals for a new price spread. Nigeria, he said, has proposed a differential of only $2, while Saudi Arabia, a major producer of heavy crude, has proposed that the differential be cut to $2.90.

Asked if OPEC would lower the benchmark of $29 while reducing the difference in price between heavy crude oil and the lightest oil, Subroto--who uses no first name--said: “Let us not prejudge what will take place tomorrow.”

The OPEC ministers, who were able to raise the cartel’s prices at will in the 1970s, have been showing a good deal of testiness under the enormous pressure these days to cut the price just the way they were forced to in 1983.

Some of that testiness was demonstrated when they announced that they had refused to accredit Wall Street Journal reporter Youssef M. Ibrahim to cover the conference because he had reported “inaccurate and defamatory information on the private lives of OPEC delegates.”

Ibrahim, who has covered OPEC for the Wall Street Journal since 1981 and is regarded as one of the most authoritative journalistic analysts of the activities of the cartel, described how OPEC ministers were staying in $1,200- to $1,600-a-day suites at the Inter-Continental, flying to Geneva in private planes and hiring $200 to $1,000 a night “escorts” for evening entertainment. Ibrahim also described some of the personal animosity between ministers.