Word: petroleum
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CONSERVATION. By cutting demand, the major consumers of oil can force the members of the Organization of Petroleum Exporting Countries into production cuts that some of them, at least, will eventually find intolerable. Needing greater revenues, these oil countries would buck the cartel, increase output-and lower prices. The U.S., said Kissinger, intends to reduce oil imports from about 7 million bbl.- per day now to 6 million bbl. by the end of 1975-and to only 1 million...
...gushed black gold as rapidly as foreign currency and other forms of monetary reserves are pouring into the treasuries of the countries that quadrupled oil prices in the past year. According to figures released last week by the International Monetary Fund, the 13 members of the Organization of the Petroleum Exporting Countries had piled up by Sept. 30 more than $38 billion of monetary reserves, or an awesome 19% of the world total, v. $13 billion, or 7% of the global total, a year earlier. Nigeria's reserves multiplied nine times, to $4 billion; Iran's six times...
...cartel members, of course, are accumulating this wealth at the expense of the countries that buy their petroleum. Largely because of inflated oil prices, Britain this year is running a deficit of about $10 billion on trade in goods and services, Italy $9 billion, and France $6 billion. The U.S. too is slipping deeper into the red. Surprisingly, some oil-importing countries have increased their monetary reserves slightly this year -but largely by borrowing, from banks and each other, to pay their oil bills. The huge and growing debts put a crushing interest burden on some nations. Italy will...
...industries. Such loans may slightly and temporarily relieve the strain on Western treasuries, but in the long run, the present situation is unsustainable. Eventually the Western nations will have to cut oil imports-at the cost of damage to their economies- unless the oil producers cut the price of petroleum to a level that their customers can afford...
Exorbitant oil prices also reduce food production; the hungriest nations find it ever harder to pay for petroleum-based fertilizers. These same nations are strapped for money to buy imported food because they have to spend so much of their scant foreign exchange just to buy oil. Yet the Organization of Petroleum Exporting Countries is unperturbed. The OPEC cartel shows no disposition to cut prices significantly...