Behind the OPEC crisis

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REMEMBER 1973? And 1979? As the capitalist world plunged into slump and millions lost their jobs, western governments wrung their hands and blamed it all on the greedy Arabs.

Now the world stands, in danger of a new economic disaster if oil prices go down too fast!

There is a grain of truth in the argument. The conditions for crisis are created by the inherent chaos of production for profit. But sudden price shifts can be the last straw.

The essence of capitalism is that nothing can be done economically without a suitEND Thanks to all our supporters who've sent in money this week. We've had £271.28, bringing our March Fund to £413.28.

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The OPEC decision on Monday 14th was what the oil importing capitalist big powers have been looking for: a controlled, moderate price reduction.

It could also ease the plight of the oil-importing underdeveloped countries, which have been the main sufferers from the 1970s' oil price rises. At the same time it will aggravate an already grim situation for countries like Mexico, Venezuela, and Nigeria. Peasants and workers like the immigrants recently expelled from Nigeria will bear the brunt.

If the OPEC agreement breaks down, and prices plummet, then it will mean catastrophe for these countries and chaos in the capitalist world.

Two trends lie behind OPEC's crisis. First, declining demand. Capitalist world consumption of oil is about 10% down on 1980. Recession, and moves to economise on energy or substitute alternative , sources, combine to generate this result.

Second, the rise of nonOPEC producers. OPEC production in 1982 was barely more than a third of capitalist world consumption. In 1973 it was over 60%. The USSR has been selling more, and so have Mexico, Britain and Norway.

The current crisis broke when when the British National Oil Corporation recommended a $3/barrel price cut from February 1. Nigeria, hard hit by competition, responded by breaking OPEC ranks and cutting its prices by $5.50/barrel.

What gives OPEC nightmares now is the prospect of North Sea producers cutting prices further to respond to the OPEC reductions. Saudi Arabia's Yamani said it would be 'inviting a price war' Energy supplies are too serious a matter to be left in the hands of oil companies and capitalist governments.