Saudi Minister Says Oil Price War Possible

Saudi Arabian Oil Minister Ahmed Zaki Yamani, in an interview published Friday, predicted that a global price war may erupt next year that could cause the cost of crude oil to drop by as much as $10 a barrel.

Yamani told the International Herald Tribune that a price war could be averted if producers around the world restrain production before an expected seasonal drop in demand next spring or summer. But he said non-OPEC producers did not seem ready for such cooperation.

“I think--it’s only my expectation--that probably for the first summer they will not take it seriously and they will go into a price war,” he said. “Maybe the summer of 1987 is the time they will realize the facts of life.”

Saudi Arabia is the biggest exporter in the Organization of Petroleum Exporting Countries and can influence world oil prices by adjusting its production.

Yamani said prices could plunge below $20 during the summer of 1986 from the current $25 to $30 per barrel for most grades of crude. Prices would then likely rebound to present levels or higher by the winter of 1987, he said.