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What next in Begin-Saudi battle for Reagan's favor; Saudis ask 'gesture'

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Saudi Arabia appears confident that its determination to keep oil prices low will be rewarded by an American political gesture toward the Palestinians. Hard-line statements by Saudi Oil Minister Sheikh Ahmad Zaki Yamani -- in effect blocking attempts to convene an extraordinary OPEC meeting later this month -- are said by Kuwaiti officials to have been at least partially influenced by President Reagan's performance during talks Sept. 9-10 with Israeli Prime Minister Menachem Begin.

Sources within the Organization of Petroleum Exporting Countries admit that Saudi Arabia's attitude makes an OPEC meeting on oil prices to be held before the scheduled December Abu Dhabi conference "highly unlikely." These sources say that Saudi Arabia's refusal to discuss a raise of its base rate beyond the present $32 per barrel "leaves no room for compromise."

Diplomats see Saudi Arabia's intransigence on oil prices as a means of giving the US time to respond to the Saudi initiative. A failure by the US to reward Saudi moderation in terms of a resolution of the Middle East conflict and of battling for low oil prices would result in Saudi Arabi feeling abused and betrayed -- an attitude that could influence the Saudi position during the December conference.

Several OPEC oil ministers, however, hope to take the opportunity of an oil seminar at Oxford, England, this week to try to iron out their differences.

Kuwaiti Oil Minister Sheikh Ali Khalifa traveled to London Sept. 9 to set up a private meeting and has been in contact with his colleagues in several OPEC countries. Sheikh Yamani and Libyan Oil Minister Abdul-Salaam Zaqar have also arrived in Britain.

But in an apparant attack on Saudi strategy, Iraqi Oil Minster Tayeh Abdul Karim told a Kuwaiti newspaper Sept. 12 that Arab oil states should reconsider their investments in the West. "These funds only serve the interests of some industrialized countries, particularly the United States, which makes no secret of its enmity toward the Arab world and supplies with Israel with the tools of death and destruction," Mr. Kerim was quoted as saying.


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