Ministers of the 13-nation Organization of Petroleum Exporting Countries began their fourth meeting of the year here Monday to try to stem the continuing fall in the price of oil, now at its lowest levels since late 1973.
But about all that they agreed on is the fact that they cannot agree.
"A waste of time," Algeria's energy minister, Belkacem Nabi, said as he brushed past newsmen after the first session. Mana Said Oteiba, oil minister of the United Arab Emirates, said the ministers were facing "an impossible task."
Only Nigerian Energy Minister Rilwanu Lukman, who is OPEC's current president, used the word "hopeful," but he did not say what he was hopeful about.
Further Slide Seen
After the 90-minute opening session, at which officials presented their governments' responses to a proposal adopted by a majority of ministers at their last meeting in June, the conference adjourned until this morning.
In the month since the ministers met on the Yugoslav island of Brioni in the Adriatic, oil prices have dropped well below $10 per barrel, and analysts are now forecasting that a basement of about $5 per barrel may well be reached before the end of the summer. (However, oil futures rose slightly Monday on the New York Mercantile Exchange, where crude oil for delivery in September closed at $11.07, up 17 cents.)
But the lower the price sinks, the less chance there appears to be that OPEC will ever reach an agreement on concerted action to do anything that would restore the market.
For months now it has been "every man for himself" among the organization's members, without even a semblance of discipline in its old system of production quotas. One year ago, OPEC was supposed to be observing a collective production ceiling of about 16.5 million barrels per day, but now OPEC production is running at about 20 million barrels per day--and no one is prepared to agree on production cuts.
Moreover, after months of holding its production well below its old quota figure of 4.5 million barrels per day, Saudi Arabia has now turned up the tap in the last six weeks and is flooding the market with an estimated 6 million barrels per day.
Saudi oil is about the cheapest in the world to produce, and the Saudi tactic now seems to be aimed at deliberately driving high-cost producers and marginal producers to the wall as a means of forcing them to halt production so that prices will eventually move back up.
The effect of the low oil prices has already been seen in the closure of hundreds of low-production stripper wells in the United States.
No Mood to Bargain
Saudi Arabia appears to be in no mood to bargain with other members of the oil cartel over any new production agreement. And, without the Saudis, no agreement among the members is possible. Moreover, it is equally impossible for the organization to arrive at any agreement that will cover both Iran and Iraq, which are at war with each other.
Iran's deputy oil minister, Hossein Kazempour, said Monday that his country will insist on double any new quota that Iraq might be granted under a new production agreement. Not unexpectedly, the Iraqis are saying that they will never accept a quota that is any less than Iran's.