• Short Summary

    Six major oil producing nations of the Arabian gulf area are to more than double the price of oil for expert from the start of 1974.

  • Description

    SV INT People seated in room with Shah seated at desk

    SCU Shah speaks

    This was how the Shah announced the increases:

    "Our experts have to study what prices we should put on our oil -- this natural resource that is going to be finished in 30 years time unless new sources of....I mean, unless new structures are found. Quite possibly we could go deeper in the search for oil. Now we were confronted by this problem. What price should we ask for oil, when in some cases people were offering such prices? And we had even heard that some companies had bought oil in Nigeria for 16.8 dollars had resold that oil for 30 dollars a barrel. So it was really a wild price market, based on nothing concrete. We suggested to the members of OPEC -- to the regional members and to the other members of OPEC, the general observers -- to base the whole thing on this net concept."

    Initials BB/1722 TH/PN/BB/1731

    Script is copyright Reuters Limited. All rights reserved

    Background: Six major oil producing nations of the Arabian gulf area are to more than double the price of oil for expert from the start of 1974. This latest move in the energy crisis was announced by the Shah of Iran yesterday (Sunday, December 23).

    The Shah warned industrial nations to "tighten their belts" because the era of cheap oil had gone for ever. He was speaking at a Palace news conference at the end of a price fixing session by the Gulf area states, which supply about 43 per cent of the non-communist world's oil and possess about two-thirds of known world reserves.

    There's every indication that the price rises could be adopted by other oil producers. The meeting by the six Gulf States (Abu Dhabi, Iran, Iraq, Kuwait, Qatar and Saudi Arabia. was also attended by observers from five fellow nations in the Organisation of Petroleum Exporting Countries (OPEC) -- Algeria, Indonesia, Libya, Nigeria and Venezuela. The Shah announced that a full meeting of OPEC is being called for January 7 so that the price rises can be discussed.

    The Shah's announcement means that the price of oil will be doubled to a minimum of seven dollars a barrel. But by the time the oil companies have paid taxes and royalties, this minimum will increase to 11.65 dollars.

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    Reuters - Source to be Verified
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