ABSTRACT
Various theories of the oil price, which were reinforced by the events of the 1979-1980 period, were advanced in OPEC councils. The moderates maintained that the oil price should reach a level that would make it competitive with the prices of energy alternatives but should climb gradually so that consumers could adjust to it. Because the costs of alternatives were constantly rising, the price of oil would inevitably rise as well. The more hawkish or radical members saw no limit to the price of oil, for the Western consumers had no choice but to depend on oil. They would have to pay whatever the producers exacted from them. They would have to adjust to the high prices and, in the process, would have no option but to transfer a considerable part of their wealth to the producers. Even in 1978, Jamshid Amouzegar of Iran predicted that after a few years the scarcity of oil would raise prices to such levels that OPEC would no longer be needed. This assessment was shared, at the time, by the Saudi Arabian oil minister.
