Page 430 - Arabia the Gulf and the West

The c Sting" 4*7

vast fortunes and been treated by the rest of the world with gratifying defer­
ence. Their accusations of exploitation stem almost wholly from a comparison
between the prices paid for crude oil from the Gulf fields with those obtained
by domestic producers in the United States, a comparison which, for obvious
reasons, not the least being the relative costs of production, is both illogical and
irrelevant.
Although the great number and variety of oilfields in the United States
makes it difficult to estimate the average cost of production of a barrel of
American oil, a figure of between $1.50 and $2.00 would not be too wide of the
mark. The cost of production in Kuwait, as we have seen, is 10 cents a barrel (a
few years ago it was about 6 cents), while in the Middle East as a whole it is 25
cents. The official selling price of the Gulf marker crude in the summer of 1979
was $18.00 a barrel, which was equivalent to 180 times the cost of production in
Kuwait, and over seventy times the average cost in the Middle East in general.
A comparison of the financial returns enjoyed respectively by the Middle-
Eastern oil states and the oil companies reveals a like imbalance. In i960 these
states received a total of $1,720 million in revenues, while the companies
earned a similar sum. In 1970 the oil states received $4,500 million in revenues,
the companies $1,685 million. In 1974 the oil states received $76,500 million,
the companies $1,516 million. Later figures show an even more monumental
imbalance. One can only conclude that if the oil states of the Middle East have
been exploited in any way, it is surely the type of exploitation which the great
mass of mankind would welcome with open arms.

The extent of the riches which the Middle-Eastern oil states have accumulated
during the present decade is well-nigh impossible to ascertain, for the owners
are conspicuously shy of revealing the degree of their wealth and may even, in
some cases, be uncertain themselves of exactly how many millions or milliards
they command. From time to time figures are put out by government bodies
and other institutions in the West - among them the United States Treasury,
the Bank of England, the International Monetary Fund, the Bank for Inter­
national Settlements, the major international commercial banks and the oil
companies - as estimates of the size of the financial surpluses built up by these
states. While the figures, not surprisingly, do not agree, they approximate
sufficiently to permit some tentative conclusions to be reached about the extent
of these surpluses. It must be recalled, furthermore, in assessing the
significance of these surpluses, that they represent the residual disposable
funds of the oil-producing countries after all expenditures have been met,
expenditures which, in the case of the Gulf states, are among the highest per
capita in the world.
According to the United States Treasury in May 1977, the thirteen members
of OPEC had total reserves of $6,000 million before 1973. By the end of the
first quarter of 1977 these reserves had grown to $145,000 million. Another