Living with OPEC

(2 of 2)

Ending Confrontation. Instead of confrontation, the U.S. is now seeking to influence OPEC through accommodation with Saudi Arabia, the cartel's most influential member and biggest producer. The Saudis' avid antiCommunism, their support of Egyptian President Anwar Sadat against more radical Arab leaders and their relatively moderate position on oil pricing make them particularly acceptable to American policymakers. Despite its vast wealth, Saudi Arabia is still essentially a feudal state badly in need of both industrial and agricultural development. In the past year or so, the U.S. has signed agreements to provide the Saudis with military and technical assistance, including electrification projects and agricultural development programs. Says Saudi Information Minister Muhammed Abdo Yamani: "We see signs that make us optimistic about American policy."

The strategy worked last fall, when the Saudis held the latest OPEC price boost to a stated 10%, though some cartel members had wanted much more. Whether OPEC will continue to present even a facade of moderation, however, remains open to question. Iranian Interior Minister Jamshid Amouzegar recently noted that with the expected worldwide economic recovery, new oil price boosts "will become possible again in mid-1976."