Page 421 - Arabia the Gulf and the West

418 Arabia, the Gulf and the West

the Kuwait meeting of 16 October that posted prices should always be 40 per
cent above the market price of oil. Although the delegates would not admit it
publicly, the decision was an acknowledgement of the impossibility of adher­
ing to the formula in the chaotic market conditions which they themselves had
created with the oil embargo, the production cuts, the huge price rises and a
mass of complicated differentials for calculating the posted prices of the
various crudes.

Finally, the OPEC delegates refused to institute a two-tier system of prices
for the benefit of the poorer Afro-Asian oil-consuming countries. After all the
impassioned rhetoric which had poured forth from the OPEC governments

about unrestrained exploitation by Western ‘imperialists’ and the crying need
to redress the economic balance between the rich industrial nations and les
damnes de la terre, the refusal came as a great disappointment to those in the
West who had set any store by this rhetoric. Yet if they had followed OPEC’s
actions at all closely over the years, instead of accepting its verbal outpourings
at face value, they would not have had cause for disenchantment. When the

plight of the poorer Afro-Asian countries in the face of rising oil prices had
been brought to the attention of the OPEC delegates at Tehran in February
1971, with the suggestion that they be permitted to buy oil at a lower price, the
delegates replied that a two-tier system of prices would lead inevitably to much
of the cheaper oil ending up in Western hands through its re-sale by the

Afro-Asian states. What the West had to realize, the OPEC delegates argued,
was that the member states of OPEC were themselves ‘under-developed’ and
had need of all the revenues they could get for their own use. If Europe, the
United States and Japan were so concerned about the welfare of India or
Tanzania or Colombia, the delegates added, they had ample means of their own
with which to assist these countries. The reply left no doubt that, in the minds
of the OPEC governments, considerations of magnanimity or compassion, if

they existed at all, took second place to calculations of political and financia
advantage. The Geneva conference of January 1974 and subsequent events
merely confirmed the fact. All that the OPEC governments were prepared to

do, in response to appeals made to them by the less affluent Afro-Asian states in
the months which followed, was to offer loans and establish investment fun ,s
to help mitigate the adverse effects of higher oil prices on the latter s
economies. In other words, they were prepared to return some of the money
they had extorted from the poorer countries, taking good care as they 1
that they received a quid pro quo in the form of political support at the nite

Nations and elsewhere. Europe
There was no rising up in their wrath by the powers of Western
against this latest instance of OPEC’s rapacity - far from it. Unnerved oy
embargo and the production cuts, they could think of little else bu
future supplies of oil, regardless of cost. In vain did the United Sta

of the treasury, George Schultz, argue at a meeting of the indu