INTERNATIONAL OIL DEVELOPMENTS - - - COMMUNIST COUNTRIES BALK AT ARAB OIL PRICE

Created: 3/15/1974

OCR scan of the original document, errors are possible

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CW 'mORlCAl pp.-

COMMUNIST COUNTRIES BALK AT ARAB OIL PRICES

Soviel and Easl European imports of crude oil from the Middle East and North Africa fell sharply beginning with lhe first of ihe year and may beelow anticipated levels. The USSK and Eastern Europe have been balking at their suppliers' terms, which include higher than market-level prices, firm contracts, and payment in hard currency.

No Iraqi oil has been obtained by the USSR sinceecause Moscow docs not wish toer barrel in hard currency. High-level negotiations between Soviel and Iraqi officials have not resolved the issue to date. The USSR reportedly had plans lo procure as muchf Iraqi oilut with (he cessation of deliveries so farhis goal probably will not be realized.

Deliveries of Libyan oil to the USSR also have stopped sincepparently because of Moscow's refusal to accept higher priceser barrel).

During the past few weeks, Iraq has offered oil to Hungary5 per barrel, instead ofer barrel requested inhe Hungarians are still holding outriceer barrel, which they claim is more nearly the average price in the present market.

Shipping reports through the firstays of Marchharp decline in oil deliveries from Iraq to Bulgaria in4 and no further shipments since then. Reports indicate that the major refinery in Burgas is in danger of having to reduce operations becauseack of crude oil.

Moscow probably could make up for the loss of Middle Easl oil delivered to Eastern Europe on Soviel account for about six months. The USSR is in the position of having agreed to supply Eastern Europe with

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its own oilixed price ofer barrel, when il could gel aboul four limes lhal much in luid currency from Ihe Wcsi. Deliveries

astern Europe above ihcse com mil men Is almost certainly would be al

i.'ic new. higher world prices.

Soviel exports lo Western Europe iippear lo be running near. Moscow values ils reputationeliable supplier, oilof its best hard currency earners Reports in3 thai iherunning behind on deliveries io France and West Germany wereinformation fromhcse countries shows Sovielwithin contracl limits.

Original document.

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