Says Mr. OPEC: Stabilize Oil Prices

Calling for faith in the free market, the Saudi Arabian oil minister and representative to OPEC on September 4 told a packed audience that the oil cartel must strengthen itself for "price stability in the long run."

Speaking at a Kennedy School of Government symposium, Sheik Ahmed Z. Yamani urged all oil-producing nations to prevent fluctuations in world oil prices by establishing a collective price structure based on the long-term equilibrium between supply and demand.

Yamni, a 1960 graduate of the Law School, made his comments before more than 650 spectators at a symposium entitled "Oil Markets: Past, Present and Future--Personal Reflections of His Excellency Ahmed Zaki Yamani."

The oil minister of one of the most powerful OPEC nations, Yamani said pricing by oil producers based only on short-term supply and demand trends led to the dramatic fall in petroleum prices from more than $30 per barrel in 1980 to a low of $9 in July 1986.

Yamani said that his comments would anger some of his peers but that a majority of OPEC members were coming around to his thinking.

Criticizing the call for import restrictions, Yamani warned that such pressures could "lead to trade wars and spell the end of free trade practices."

"Producers as well as consumers should adopt policies that shun drastic interference in the market forces which may disturb the much sought for long-term stability," he said. "It is only through the acheivement of long-term free market equilibrium that stability can be [attained]."