Page 387 - Arabia the Gulf and the West

384 Arabia, the Gulf and the West

companies later that week. ‘In the case of failure of the forthcoming negotia­
tions,’ the secretary-general, Khene, warned, ‘the conference will resume its
meeting to decide on sanctions to be taken.’
At the negotiations which followed at Geneva the OPEC representatives
were in contentious form, despite the addition to the negotiating committee of
two so-called ‘moderates’, Yamani and Jamshid Amuzegar. The companies, at
cross-purposes among themselves, gave in within the week. Yet another

agreement was signed on 1 June raising the price of oil by 11.9 per cent,
effective immediately. It would net the producing states a further $1,000
million a year. Posted prices were to be adjusted monthly instead of quarterly
(as under the Geneva 1972 formula), so as to take account of any fluctuations in
the international value of the dollar. The agreement was to run for the remain­
ing period of the Tehran settlement, i.e. until the end of 1975. After the signing

Amuzegar went around assuring anyone who would listen that posted prices
would fall if the international value of the dollar were to rise. As an assurance, it
was worth exactly nothing.
The Geneva ‘agreement’ shattered once and for all the pretence which had
been maintained since the Tehran settlement of 1971 that oil prices were
decided by negotiation. It was not an agreement but a diktat, as indeed had
been every decision on prices since 1970. It also revealed as something of a

sham the grounds upon which the oil companies were continuing to negotiate
with OPEC as one body. The justification urged by the companies for the issue
of successive business review letters by the United States Department of
Justice, to protect them from possible anti-trust actions, was the public
interest. But the public interest at stake in the combined negotiations was the
stability of oil prices, not their constant augmentation. What the companies
were doing was interpreting, or reinterpreting, the public interest to accord

with their own priorities, and in this the lead was taken by the parent com­
panies of ARAMCO. For reasons which will be described shortly (and which
were as much political as they were economic), the ARAMCO partners were
far more concerned at Geneva with ensuring continued and unhampered access
to Saudi Arabian crude than they were with holding down prices for the sake of
the consumers. It was their insistence upon pursuing this object as their
foremost priority which was as responsible as any other factor for the feeble­

ness of the companies’ resistance to the OPEC ukase.
One did not have to be a dyed-in-the-wool cynic to regard the Geneva
‘settlement’ as settling nothing. The only function that it served was to mar
the opening of the 1973 leap-frogging season. Naturally, the Libyans were e

first off the mark. At a public assembly in Tripoli on 11 June, ten days alter
signing of the ‘settlement’, Colonel Qaddafi melodramatically announced tn
nationalization of Bunker Hunt’s assets and operations in Libya^ It was^
theatrical performance to rival that of his hero and exemplar, a
Nasser, when in July 1956 he announced the nationalization of the