ABSTRACT
This chapter explains the structure around three main interrelated topics, namely, price, the balance of international payments, and development policy in the oil-producing countries. The outside world has so far failed to develop substitutes for petroleum and the higher prices of 1973-1974 have more or less prevailed; but the search for alternatives has been put in motion and it is just a matter of time before these substitutes are developed. The producers must attempt to develop other sources of income. The prevailing conditions include payment for oil in depreciating dollars, negative-bearing financial investments, and wasteful expenditure at home. To induce the oil producers to maintain and expand their oil output there should be cooperation by all sides to offer them a fair price for their product, boost their financial returns through inflation-proof investments and offer them the opportunity to channel their investment outside their borders where the returns on investments should be higher.
