OPEC Ministers representing 13 states gave the industrial West a major reprieve on Monday (June 19) when the organization agreed to maintain its eighteen month old price freeze, apparently at the insistence of Saudi Arabia.
INT Delegates entering foyer
SV Saudi Oil Minister Sheikh Ahmed Zaki Yamani entering foyer
GV and SV other officials arriving (2 shots)
SV PAN Yamani leaving
SV Other officials leaving
Yamani into car and drives off
The three basic questions being discussed were whether there would be a price rise to compensate for the falling value of the U.S. dollar in which oil prices are calculated; whether any rise would take account of past revenue losses or merely protect OPEC revenues from further dollar fluctuations, and a possible formula linking the price of oil to the dollar's value against other currencies.
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Background: OPEC Ministers representing 13 states gave the industrial West a major reprieve on Monday (June 19) when the organization agreed to maintain its eighteen month old price freeze, apparently at the insistence of Saudi Arabia. Saudi oil minister, Sheikh Yamani, said that oil prices would remain frozen at least until the end of the year, adding he was very happy with this result.
SYNOPSIS: Algeria, Libya and Kuwait pressed for a rise of five to fifteen percent to compensate for the fall in the value of the US dollar: Saudi Oil Minister, Sheikh Ahmed Zaki Yamani, representing the world's largest oil producer, was under increasing pressure to call at least a token increase. The Saudi's are adamant that the depressed western industrial economies cannot withstand any increase in the oil price now, if they are to recover satisfactorily from the after-effects of the quadrupling of oil prices by OPEC in 1973. Iran, which has supported the Saudis, was showing greater flexibility in Sunday's talks.
Yamani has had to stand alone against any increase in the price of oil, and some delegates believed that Saudi Arabia, whose income far exceeds its immediate needs, was unlikely to moderate it's stand. Delegates generally agreed that OPEC might suffer irreparable damage if there was a second split on prices. In December 1976, the majority decided to raise prices by 15 per cent, while Saudi Arabia and the United Emirates opted for a five per cent rise. The split was resolved in mid-1977. Delegates said the ministers would discuss several possible policies on Sunday (18 June), including a formula to protect oil incomes against future dollar fluctuations. A planned visit by Saudi Arabia's Crown Prince Fahd coincided with the talks and Sheikh Yamani left the conference to greet him at the airport. Sources said his presence might help negotiations in case of continuing deadlock.