ABSTRACT
In mid-1978 it seemed that the energy crisis that began in October 1973 had stabilized. Oil prices had been frozen since July 1977, demand for oil had dropped, and production was reduced. The Organization of Petroleum Exporting Countries (OPEC) revenue surplus had practically reached zero, while the developed countries experienced a surplus of $8 billion. When, early in 1979, the situation in Iran deteriorated rapidly and Iranian oil production of about 5 million barrels a day came to a total standstill, reaching a point at which it was necessary for Iran to import oil for local consumption, the Western consuming countries were thrown into a panic. The conference simply recognized the realities of the market and its inability to compel members to abide by the price decisions, as had been clarified in the Secretariat statement. As the rate of oil price increases accelerated, Saudi Arabia was determined, more than ever, to reestablish an OPEC uniform system.
