Economic Issues for the Oil-importing Countries

Abstract

The dramatic increase in oil prices towards the end of 1973 has posed major problems for economic policy in both oil-producing and oil-consuming countries.¹ The oil producers, members of the Organisation of Petroleum Exporting Countries (OPEC), have to decide where and how to hold the surplus revenues accruing to them. They also have to work out future policy on oil production and on the diversification of their economies. These problems were beginning to appear even at prices ruling before October 1973. They have since been greatly magnified. Consumers, for their part, while pressing ahead with the development of alternative energy sources, have to manage the payments deficits which are the counterpart of the producing countries’ surpluses.