ANALYSIS : Hand-Wringing by OPEC but No Action : Cartel’s Best Efforts to Curb Oil Glut Aren’t Likely to Boost Prices

The pricing committee of the Organization of Petroleum Exporting Countries expressed concern about deteriorating oil prices at a meeting in Lausanne, Switzerland, on Wednesday but took no action to make OPEC members cut excess production.

So oil prices continued downward--to about $15.20 a barrel for West Texas Intermediate--while OPEC’s Secretary General Subroto of Indonesia said that an end to the Iran-Iraq war--when it finally comes--would enable OPEC to shore up oil prices.

But Subroto was only whistling Dixie. He probably knows as well as anyone that when peace comes at last to the Persian Gulf, the outlook is for oil prices to decline.

The two combatants themselves will hike their production to raise money to erase war debt and rebuild their economies. Iraq may add an additional 1 million barrels a day to the world’s oil surplus--which stands at roughly 10 million barrels a day. And Iran may add to its output also, once technicians can get to work on some of its damaged or depleting wells.

So oil prices should stay low in the short term.

The bigger news is that analysts see prices remaining relatively low in the long term, too. A major factor in that prediction is Iraq, and its President Saddam Hussein. Iraq is believed to have more than 100 billion barrels in reserves, much of it waiting to be drilled and developed. (At present its proven reserves are roughly 30 billion barrels.) That means Iraq ultimately will rank second only to Saudi Arabia as an oil power.

The prospect is not reassuring for the world. Hussein’s government, which has ruled Iraq since 1968, has committed political executions and torture, according to Amnesty International; Hussein’s armies have used mustard gas and chemical warfare, according to United Nations investigators. Before the war began in 1980, Hussein posed a real threat to Kuwait and Saudi Arabia--who nonetheless supported him in the war against Iran. What he does in the future, with a battle-hardened army and air force backing his ambitions, is a prospect likely to keep tensions high--and oil supplies threatened--in the Middle East.

So non-OPEC nations everywhere will continue to drill for their own supplies.

All of which argues for continued low oil prices, say analysts, lower in the next year than they have been but not really rising much even into the 1990s.

The next 10 years will be a time when prices rise and fall according to the world’s economic activity--as low as $12 a barrel, as high as $20, says Joseph Tovey of Tovey & Co., a New York investment banker specializing in energy. “The price may not go above $25, adjusted for inflation, until the next century.”

This is good news in several ways, of course. It means a real curb on rising inflation, and therefore on interest rates, in the next year. It means stable gasoline prices and no rise in heating oil prices this winter.

But does it mean new disruptions for energy, further hardship for oil companies and the oil regions? Probably not.

By this time, those oil companies that remain in business are survivors in for the long haul. Others have merged or sold out, or are doing so because they see a decade ahead, in the words of analyst Barry C. Good of Morgan Stanley, “when oil will be a commodity, much as it was in the 1960s”--before the rapid price shifts and inflation of the 1970s. In such times, oil companies work on tight margins and oil reserves are bought and sold at low prices.

As appears to be the case in some prominent current sales. Market speculation anticipates a price of about $4 a barrel for the Canadian reserves Texaco has put up for sale. It is thought that Tenneco will get $5 to $6 a barrel for the oil and gas reserves it put on the block at the end of May. (Such estimates for oil in the ground indicate a per-barrel price for produced crude oil of $12 to $18.)

So OPEC pricing committees can haggle and bluster all they want, but the oil outlook is for prices no higher than they are today--unless, of course, fanatics like Khomeini and Hussein find some way to upset the apple cart.