INTELLIGENCE MEMORANDUM - PROJECTED WORLD OIL DEMAND AND OPEC CURRENT ACCOUNTS, 1975-77

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500180003-6
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 48
• Document Creation Date: December 9, 2016
• Document Release Date: March 5, 1999
• Sequence Number: 3
• Publication Date: March 1, 1975
• Content Type: IM

975-7~~ ~ER~IM ~`T5~+3
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TCyA OrrICIAL USE ONLY
Intelligence 1V~iemora.ndur~
Projected -~orld Oil Demand
and OPEC Current Accounts, 1975 -77
ER IM 75.3
March 1975
Copy No.
lE7
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This paper estimates the likely demand for OPEC: oil and the balance of
pa!~ ments for OPEC members during 1975-', 7. It is an estimate yin the sense that
we make reasoned judgments based on analysis of all available iriforrnation about
trends in economic activity, c)n the relationship of GNP growth to energy
consumg~tion, and on the supply of alternative forms of energy? We use this total
demand estimate as a ~~onstraint on cartel exports and then take into account
political considerations like the domestic economic objectives of OPEC member
states and the desire of OPEC bovernments not to disrupt 'the cartel. Uncertainties
during tl,~:is time period ;are probably small enough to keep errors w}thin reasonable
bounds. ~'~de discuss the period beyond 1977, but the uncert.aint~ies are much @reater.
T}u.s is essentially a market analysis. We do not attemfrt tr,~ factor in the results
of possible major politi,~al initiatives, which could bring shifts in oil policy on
tha part: of some key (.)PEC m.ernbers.
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Projected World Oil Demand
and OPEC Current Accounts
1975-77
The economic performance of the major industrial countries will be the single
most critical factor determining Free World oil demand over the nc~;t three years.
Output currently is falling in nearly all industrial countries, but recovery generally
is expected to begin by yearend. Barring petrodollar recycling difficulties, we expect
output in OECD countries to rise by about 4% next ,year and 7% in 1977, as
the recovery gains momentum. This growth -- combined with continuing consumer
reactions to high oil prices and the impact of any policy decisions to suppress
oil demand -will determine the demand for OPEC oil.
The pattern of oil import demand this year will be significantly different from
that in years past. Consumers will enter the spring season with full stocks. As
a result, import demand wil! slump sharply during the secc,nd and third quarters --
to only about 25 million b/d, compared with about ;!7 million b/d this past
February. Import demand will then rise sharply to about 29 million b/d for the
fourth quarter. Demand for OPEC oil during 1975 as a, ~rhole will be down about
8%, to 27 rni!lion b/d.
17 1976 and 1977, economic recovery will cause demand for OPEC oil to
increase above the 1975 level. Demand for OPEC oil should grow by about 2?Io,
or by 600,000 b/d in 1976. In 1977, more rapid econL~mic growth will cause OPEC
sales to increase by a further 7%o, or by 1.8 million b/d. OPEC's export volume,
however, will still be lower in 1977 than it was in 1973.
Had it not been for the Saudi production cutback, the next few months would
have been somewhat difficult for OPEC because of declining consumer demand.
The Saudi action has largely eliminated the threatened surplus. In any event as
fall approaches, Ol'.BC's task will shift from one of informally allocating production
cuts to determining in the same informal way the members' share of the production
Note: Comments and queries regarding this memorandum are welcomed. They may
25X1A9a be directed to
of the Office of Economic Research, Code 143,
Extension 7884.
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increases that arc certain to occur. Willi the demand for OPEC oil incrc!,sing in
the, next two years, the contentious issue of production cuts will not recur. We
do not see the issue of determining the share of incrcase~l demand as a probl sm
for the cartel. We believe that those countries that need more revenue will be
tacitly allowed to raise output by the large producers who will meet less of the
new demand from their own production.
During 1975-77, OI'LC countries collectively will accumulate surplus funci~,
averaging US $60 billion a year. Only Algeria, Ecuador, Indonesia, Venezuela, an. ",
perhaps Libya will have current account deficits. Other OPEC members wily
continue to accumulate large surr~,r;es. By the end of 1977, OPEC states will ha~r~a
aCCllmlllat0d a total investable Burr?ns of about $265 billion. We see no parti~.~.~~ar
stress on the cartel through 1977 so long as Saudi Arabia continues to be supportive
of OPEC pricing policy.
Beyond 1977, the situation is much less certain. OPEC exports clearly will
slump sharply by 1980 -probably to only about 22-24 million b/d. At this level,
only Saudi Arabia and Kuwait will Dave sizable surplus earnings. Such a situation
would put substantial stress on the cartel. Pressures will be strong on OPEC
countries collectively to boost the real price of oil substantially and on some
members to attempt to solve their problems by raising output. Which ~:~.nxrse is
the more likely, we cannot now estimate, because the outcome will br., heavily
influenced by political .developments both within and outside the car~ix~l.
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DISCl7SSION
1. Aside from tyre impact of any policy decisions that might affect oil
consumption, the economic performance of the major industrial countries is the
single most critical factor determining Free FNorld oil demand over the next three
years. Economic output is currently falling in nearly all the major industrial
countries. Recovery, however, is generally expected to begin by the end o}' this
year or early next year in most countries. US GNP is now expected to fall by
3?~, to 4% in 1)75,1 while Japanese arnJ, the major West European GNPs will grow
little il' at all. Because inflation is casing and political pressures arising from growing
unemployment arc mounting, many OECD nations are expected to institute strongly
stimulative economic policies during tl:c year. Barring any major financial upsets
as a result of recycling problems, the most important OECD economics -- the
United States, Japan, and West Cei~~;any -- should be well on t'ie road to recovery
by early in 1976.
2. The initial recovery, however, seems likely to be slower than has been
the case for most other postwar recessions. Stimulative policies will boost consumer
demanl fairly quickly, but other sectors will lag. We believe that OECD growth
in 1976 will be only about 4%,2 or well below long-run growth ra+P~~ West European
GNP tlppears likely to grow at about 4% or perhaps slightly les,. ,vhilc t}te Japanese
should grow aboui 5?Io. Because the gap between output and productive capacity
is very wide, fixed investment by manufacturing industries and utilities not only
will be slow to respond but probat;;y will continue to fall during most of 1976.
The economies and import capacity of the smaller devel~~.?d countries and the
non-OPEC LDCs vrill remain depressed at least until the rec-very in the major
countries increases the demand for their exports. In addition, the need and/or desire
of many nations -particularly Italy, France, the United Kingdom, and most smaller
OECD states - to improve their trade balances will cause their policymakers to
moderate the increase in domestic demand until recovery is firmly established in
the more important countries.
3. OECD economic growth in 1977 will likely accelerate. The smaller
industrial countries should. by then be recovering, and in the larger OECD countries
the lagging sectors -- fixed ii;vestment in plant and equipment and export demand -
should have begun bowing, strur.~ly. As a result of these factors, we expect OECD
1. The range of estimates for 1975 is -3% (CEA) to -4.5% (OECD). We approximate the CEA estimate
in this memorandum. C'or other countries, we make our own estimates, which conform closel}? with tliosc
of the OECll for 1975.
2 US growth in 1976 1s assumed to be 4%. We Dave estimated the 1976 GNP for other OECD countries.
There arc no of6clal OECD ~owth estimates beyond 1975.
1
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growth to increase to about 7'/o in 1977, or well above tht: long-term growth rate.3
Growth in Wcstcrn Europe should sum to about ~,S`%, in Japan it could easily
reach 11%. US GNP growth is assumed to be about 6"h. Beyond 1977, growth
should continue to be strong for a year or sc it' only because unemployment is
likely to remain 1111a000ptably high in many countries well into 1977.
4. We estimate that for each 1% change in OECll output, world energy
consumption will shift by the cquivalclzt of about 500,000 b/d of oil. Becausr~.
marginal energy supplies arc provided almost exclusively by OPEC countries, we
can expect their oi.l revenues to rise or fall by about ~2 billion for each 1 % variation
in gross OECD output.
Demand for OPEC Oil, 1975-77
5. The factors that will determine the demand for OPEC oil for the rest
of this year are already set and are not likely to change. For seasonal reasons,
demand for OPEC oil should reach its nadir this summer. The drop from February
will be unusually rapid, but so will the recovery.
6. Normally there is a swing in consumption in a given year of about 5-l /2
million b/d because of seasonal factors. Import demand, however, is usually only
slightly affected because stocks drawn down in the fall and winter are replenished
in spring and summer. Because both warm weather and precautionary imports have
kept storage tanks nearly full this winter, this sut~mer's import demand will more
closely approximate consumption. The decline f!~!m February should be about
2 million b/d. Conversely, import ~~mand will rise sharply this fall. Even if the
coming winter's stuck drawdown were normal, import demalid would rise by nearly
2 million b/d. But we expect consumers u.~ill again be reluctant to draw down
their stocks. Moreover, ecrnomic recovery may also begin to boost oil demand
by then. In These circ~:,nstances, we estimate that imports will probably rise by
about ;i-1/2 million bjd from the third to the fourth quarter tr, reach a level ;;bout
1.5 million b/d higher than this past February (see Appendix Table A-1). For the
year as a ~;hole, however, the demand for OPEC oil will be about 27 million
b/d, compared with 29 million b/d in 1974 and 30 million L/d in 1973 (see
Table 1).
3. Although this estimated rate may seem rapid, it was exceeded during tlr: recovery of 1972-73 and co_ualed
in 1954-55; in both periods the downturn was much less.
2
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7. Beginning in 1976, economic recovery should clearly lead to a rise in
energy demand. Prior to 1973, economic activity and energy consumption grew
at nearly equal rates. In economic terms the GNP elasticity of energy consumption
was about 1.0 for the major Free World countries as a group. During 1970-73,
OECD economic output grew at an average annual rate of 4.6"I?, while energy
consumption grew by 4.7?~? a ; . ?ir. Growth in GNP, energy consumption, and oil
consumption in 1970-73 was as t'ollows at annual rates.
United States
Japan
Western Europe
A11 industrial
countries
GNP
Energy
Oil
GNP Elasticity
of Energy
3.7
3.6
5.1
0.97
9.1
8.4
1 ~.5
0.92
4.7
5.2
7.3
1.10
4.6
4.7
6.9
1.02
Now, because high prices will cause consumers to practice conservation, this
relationship will change. We think it likely that energy consumption will rise only
about 70% as fast as economic output.4 Even so, demand for OPEC oil will rise
in 1976 and 1977 because production of alternative energy will not grow fast
enough to supply all of the rise in demand.
4. Most observers now expect that because of continuing reactions to higher energy prices the rclatior~ship
between energy consumption rnd GNP growth should change. Tne OCCD long-range study concludes that
the GNP elasticity wil' fall to about C.7 du-ing the period until 1980. In this memorandum, we use 0.7,
but if economic growth in 1976 and 1977 is more rapid than our scenario assumes, this elasticity wi~dd
rise because more rapid recovery would bring Tess efficient, marginal capital equipment into use sooner. Studies
by major oil companies use an elasticit:+ of 0.8 to 0.9.
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8. In 1976, OECD energy production will rise by nearly 1.3 million b/d
of oil equivalent, but economic recovery of about 4% will boost energy
consumptions by some 1.9 million b/d, or 3?l0, leading to a 2% rise in OECD oil
import requirements.
9. In ] 977, with even more rapid economic recovery expected -- some 7%
for all of OECD -consumption will likely rise by 3 million b/d of oil equivalent,
or 5%. OECD's internal supplies should rise by more than 1 million b/d of oil
equivalent, but demand for imported oil will rise by 2 million b/d, or 6%. Because
non-OPEC LDCs and China will be boosting output rapidly and gaining markets
at OPEC's expense, OPEC saps volume will rise by 2>~ in 1976 and 7?lo in 1977.
10. Even with the :ise in demand for OPEC oil, total Ol~1rC export's in 1977
will still fall short of their pre-embargo level. While we have not mace a definitive
estimate for 1978-80, OPEC sales may rise slightly in 1978 -- dependii;g upon
the rate at which Alaskan output comes on stream -and then will fall sharply
until 1980. Preliminary work on estimating 1980 demand for OPEC oil indicates
that cartel exports will fall by 5-7 million b/d between 1978 and 1980, to only
some 2z-24 million b; d, mostly as a result of expanding North Sea and Alaskan
output. This would represent a dropoff of 6-8 million b/d from the 1973 level.
11. We expect the Persian Gulf countries and Venezuela to absorb most of
the production cuts required this year. The sharpest cuts probably will be taken
by Saudi Arabia between the first of the year and mid-summer. After the expected
upturn in demand at the end of the third quarter, however, the volume of Saudi
output should rise much more sharply than that of the other Persian Gulf states
unless external political considerations cause the Saudis to impose a production
ceiling. Barring that, average Saudi output for the ,year will be only some 300,000
b/d below last year's 8.5 million b/d. Saudi output will still be about ?million
b/d below capacity. Indonesia, Ecuador, and Iraq will probably increase production
over last year's levels.
12. For the next few years, OPEC members should be able to allocate output
on a cooperative basis without formal prorationing. Rising demand for OPEC oil
in 1976 and 1977 will allow those countries that need additional *evenue -such
as Algeria, Libya, and Indonesia.- to increase output in line with their productive
capacity and financial needs. Others that also want to boost output, tike Iraq and
4
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Abu Uhabi, are likely to do so, but not at a maximum rate. Venezuelan output
will continue ~o decline in line with that country's diminishing oil reserves. Because
they will face: no revenue const,aints, Saudi Arabia, Kuwait, and Iran will probably
adjust their production during these years in a manner designed to maintain their
positions of leadership and keep the other OPEC states reasonably happy.s
13. We think the projected allocation of OPEC oil exports given in Table 2
is a reasonable one. Other allocations consistent with an internally cohesive OPEC
could also be made, but would cause no significant change in the overall OPEC
payments position.
Value of OPEC Oil Exports
14. In estimating OPEC's oil earnings in 1975, we set the average price equal
to the price on 1 January (see Table 3). OPEC has already frozen prices through
5. We allocated the projected total OPEC oil exports to the individual producers through ~n iterative process
that took into consideration their economic needs and objectives, oll resources and productive capacity, and
t3nancial flexibility.
5
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* INCLUDING GOVERNMENT REVENUES, PRODUCTION COSTS, AND
COMPANY PROFITS.
September and has hit:ted at an extension through December . Even if prices were
raised 5% for the final quarter, the average annual price w:,uld not increase much.
15. For 1976 and 1977, we increase the no*~.~inal oil price 8% and 5%,
respectively - or slightly less than our projected ratA of inflation for OECD
countres. Tius seems reasonable because OPEC countries are likely to resist
substantial erosion of the real price of oil. Ma:POVer, demand will increase ir..
1976-77, and competition from new non-OPEC oil supplies will be limited.
16. Our projections of oil export volume and prices point to a 6% decline
in the value of oil exports in 1975, followed by i 1% increases in both 1976 and
1977 (see Table 4). We thus foresee a 15% rise in OPEC oil export earnings from
1974 to 1977.
6
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VALUR OF OPEC OIL EXPORTS
DILLION US S
1974
1975
1976
1977
ALGERIA
ECUADOR
p~5
~'~
4.4
5.1
INDOAlESIA
0 ? ~
0. 7
IRAN
5.1
5.6
6.5
7.5
IRAQ
21.4
2 0. 5
2 2. 4
2 3.4
KUWAIT
6.1
7.5
9.3
11.4
LIBYA
9. 1
7. 5
8. 0
8. 4
NI CE
RIA
6.8
f;.3
6.8
8.4
.
RATAR
9. 1
8. 3
9. 4
11. 1
SAUDI A
RAB
1.9
2.0
2.2
2.~
.
.rA
31.6
31.1
31
3
U.A. F,.
~
35. A.
VENEZUELA
7. 1
5.6
6.4
7. 7
TOTAL
10.3
113
8.4
g,O
8'8
.5
106.2
117.5
130.5
Non-Oil Exports
] 7. OPEC's non-oil exports are relatively unimportant. In 1974, they were
5% of total OPEC exports, and only in Ecuador and Indonesia did they exceed 15%.
We estimate these exports will nearly double durinf; 1975-77, to $11 billion --
or 8% of total exports by 1977 (sae Table 5}. Most o~? the expected average annual
increases of about 25% reflect exports of LNG from Algeria and Iran and sales
of raw materials by Indonesia. These three countries probably will account for
nearly t~vo-thirds of OPEC's non-oil exports in 1977.
OPEC Import Growth
18. The uncertainties created by the sudde,i surge in oi,l revenues make import
projections difficult. Many OPEC countries are enjoying a highly favorable financial
situation f'or the first time and thus are greatly accelerating their development
efforts. Others that have had large revenues for some time are stepping up spending
because of the m~ finitude of their surpl';:s funds. On the whole, OPEC countries
have expanded imports at a much faster rate than most analysts anticipated a year
7
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ago. All, however, face severe physical and human constraints in absorbing rapidly
growing imports, and some simply are not interested in spending their oil revenues
at the highest possible rate. Ports, internal transport facilities, and trained manpower
already are being heavily utilized. Whether recent import growth will continue or
will soon slow sharply because of bottlenecks is the key question in preparing
irrrport projections.
19. Past performance provides some guidance. Kuwait and Saudi Arabia have
had considerable surplus funds for some time but have favored gradual
modernization. Their volume of imports grew an average of only 5% annually in
1966-72. Libya, on the other hand, has pursued more expansionary programs,
increasing imports nearly 20% a year over the same period. In the more populous
countries of Nigeria and Indonesia, where oil exports began to rise rapidly in the
late 1960s, the volume of imports increased 20%-25% per year from 1 ?~9 to 1973.6
Sustained growth in import volume averaging 20% or more annually clearly is
possible.
6. Similar large gains were achieved by Taiwan and South Korea in 1966-73 as a result of their ability
to rapidly increase exports of manufactures.
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20. We estimate that aggregate import volume will brow by 25% 'm 1975 -
about the same as in 1974 -and by 16% in both 197G and 1977.7 As Tulile G
indicates, these projections reflect a wide variety of trends in individual countries.
lior example:
? Algeria's imports will rise sharply in 197,5 because drought will bring
large purchases of foodstuffs; import growth will be much slower in
197G-77 because of financial constraints.
? Ecuador's projected large increase in 1975 is the result of military
purchases.
? Iraq's large gain in 1975 reflects elimination of many restrictions on
imports from OECD countries.
? Rates of ilnport growtlt in Saudi Arabia and the Persian Gulf sheikhdoms
fall each year because of absorption constraints.
? In Iran the projected decline from a 25% increase in 1974 to a 16%
increase in 1976 and 1977 in part reflects transport limit ]tions; the
country Ilas few major seaports and a grossly inadequate ro;ld and rail
netwol?k. We could be somewhat low on tlus. A truly Heroic effort could
overcome these obstacles.
? Venezuelan import growth will drop sharply because of a tightening of
import controls to offset falling oil export revenues.
? We expect import growtll to accelerate in Nigeria as a result of an
expanded development effort and the growing availability of funds.
? Kuwait has the lowest projected growth in import volume - 6% a year -
becattse the population is too small to justify a major industrialization
effort and already has a higher standard of living t;. n the populations
of most developed countries.
7. We have taken account of t^ng-term development programs and short-term Iluctuations caused by specific
events. We have analyzed dev .opment policies and plans, lire governrnents' records in achieving plan goals,
the available supply of skil!:;d manpower, infrastructural constraints, the size of government oil revenues,
and the time nacded for them to work their way into the general economy. For certain populous countries
such as Nigeria, Indonesia, Venezuela, and Iran, we also consider import restrictions designed to protect }ledgling
industries from foreign competition.
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TABLE G
INCREASE IN VOLUt4E ~ PRICE ~ AND VALUE OI' 01'EC IMPUIt'1'5
PERCENT
1974
1975
1976
1977
VOLUME
ALGERIA
22
43
18
8
ECUADOR
15
34
12
11
INDONESIA
17
17
17
17
IRAN
25
20
16
16
IRAQ
88
39
16
19
KUWAIT
9
6
6
6
LIBYA
35
22
18
19
NIGERIA
7
12
16
18
QATAR
25
25
25
25
SAUDI ARABIA
36
30
25
25
UNITED t~RAB EMIRATES
35
30
25
25
VENEZUELA
26
25
15
10
TOTAL
27
25
16
16
PRICE--Total
30
12
9
6
VALUE--Total
65
40
27
23
21. We have estimated the value of OPEC imports by assuming a price increase
of l 2% in 1975, 9% in 1976, and G% in 1977. These price forecasts seem reasonable
given oar economic growth projections, but they would be too low in the event
of major crop failures. As Table 7 shows, the projected value of OPEC imports
reaches $74 billion in 1977, or more than twice the 1974 level. Iran remains by
far the largest market for foreign goods, accounting for nearly 20% of the OPEC
total.
Services and Private Transfers
22. The OPEC net deficit for services and private transfers is expected to
drop from $8-1/2 billion in 1974 to $3-1/2 billion in 1977 (see Table 8). Estimates
for the four main categories of activity were obtained as follows:
l0
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VALUL OI'' UI'ls'C IMY~)R'1'S
BII.LiON U;;
.~` .Z~.
~
1.91.
1.4.711
.1.2.71
ALGERIA
2.2
3.5
5.G
7.2
8.2
ECUADGR
0.4
0.6
0.9
1.1
1.3
INDONESIA
2.5
3.8
5.0
6.4
7.9
IRAN
4.0
6.5
8.7
11.0
13.6
IRAQ
1.1
2.7
4.2
5.3
6.7
KUWAIT
1.2
1.7
1.9
2.3
2.6
LIBYA
1.7
3.0
4.1
5.2
6.6
NIGERIA
1.8
2.5
3.1
4..0
5.0
QATAR
0.2
0.3
0.4
0.4
0.5
SAUDI ARABIA
1.8
3.2
4.7
6.3
8.4
UNITED ARAB EMIRATES
0.8
1.4
2.0
2.8
3.7
VENEZUELA
2.8
4.6
6.4
8.0
9.4
TOTAL
20.5
33.7
47.1
60.1
73.8
* INCLUDING MILITARY GOODS; VALUED F.O.B.
Freight acrd Insurance -The cost of moving goods from the ports of
foreign suppliers to tltc various OPEC countries ranges from 10?fo to 15%
of the f.o.b. prices. For each OPEC country, we assume that freight and
insurance costs equal 12Io of the f.o.b. value of imports.
Lrveshne,-rt Income RecelpEs -Annual earnings on foreign assets are
as,umed to equal 8% of the value of assets.
Profit Repatriation -These outflows include repatriation of profits by
foreign oil companies and service payments to such companies to operate
government-owned oil fields. The dollar amount estimated for these
payments does not affect the projected current account balances of OPEC
cow~trics, because a corresponding inflow is included in the estimate of
export earnings.
Other -This category includes a wide range of flows, including fees paid
for foreign technology and services, interest payments on OPEC debts,
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and both inflows and outflows of remittances. Algeria, for %xamplc, has
a considerable billow al' remittances from nationals working chiefly in
trance, while most other OPCC counlrics l~urve a large outflow because
of tltcir numerous foreign oil workers. In general, these miscellaneous
flows itrc estimated to rise ut the same rate as merchandise imports.
Somewhat higher rates arc used for Trim and Saudi Arabia because a
rapidly growing number of foreign technicians arc expected to be working
in Chest: countries.
OP);C BALANC);S rOR S);RVIC);S
ANU PRIVATE TRANSrERS
-~_-~_.-._ _
.
_
]3TLLION U.7 4S
.
1974
1975
1976
1977
ALGERIA
-0. 3
-0. 7
- 1. 3
-1. 7
ECUADOR
-0.1
-0.1
-0.1
-0.2
INDONESIA
-3.3
-3.6
-4.0
-4.5
IRAN
-1.0
-0.6
-0.5
-0.2
IRAR
-0.2
-0.3
-0.3
-0.1
KUWAIT
0.4
1.0
1.5
2.0
LIBYA
-1.0
-1.0
-1.4
-1.5
NIGERIA
-1.0
-0.8
-0.7
-0.5
QATAR
0.0
0. 1.
0.3
0.4
SAUDI ARABIA
-0.9
0.7
?..0
3.3
U.A.E.
-0.1
0.2
0.4
0.6
VENEZUELA
-1. 0
- 0. 9
-1. 1
-1. 4
TOTAL
-8.6
-6.1
-5.2
-3.7
Grant-Type Assistance
23. We expect grant-type assistance disbursed by OPEC countries, which
jumped from $1 billion in 1973 to $4 billion in 1974, to fall to $2 billion in
1977s (sec Table 9). The large increase in such aid disbursements last year reflects
mainly emergency assistance pledged by Saudi Arabia and other Arab oil producers
to Egypt, Syria, and Jordan during ~}nd after tltc Middle East war of October 1973.
8. Grant-type assistance is defined us the value of goods, services, and financial flows provided by OPEC
countries to other counlrics with little or no expectation of repayment. We also include loans with a large
concessionary element but exclude flows that the OECD Development Aid Committee (DAC) defines as Other
Official Flows (OOF), which embraces portfolio investments such as World IIank bonds.
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'rABLI: 9
OPEC U'I;S13UItS[:MI?NTS OTr OFI~ICIAI.
CRAN'r-TYPE ASSISTANCE
______ __ --
..._, ._.,..._
14 ' r,
1. T p N ~
~~
~
-
_
19 7 3
1224
1,271.
~4
14Z.Z
ALGI'sRIA
0.1
0.1
0.1
0.1
ECUAllOR
0,0
0.0
0.0
0.0
INDONESIA
0.0
0.0
0.0
0.0
IRAN
0.4
0.3
0.3
0.2
IRAQ
0.4
0,2
0.2
0.2
KUWAIT
0.7
0.5
0.3
0.3
LIBYA
0.3
0.2
0.2
0.2
NIGERIA
0.0
0.0
0.0
0.0
QATAR
0.1
0.1
0.1
0.1
SAUDI ARABIA
1.6
1.0
0.5
0.5
UNITED ARAB EMIRATES
0.5
0.4
0.3
0.3
VENEZUELA
0.1
0.2
0.2
0.2
Flows to these c~untrics are expected to begin to fall in 1975. The decline probably
will be partly offset by incr~:ascs in assistance to help LDCs pay for oil imports
and finance their development projects.
Current Account Balance
24. The sum of the above estimates indicates that OPEC will run current
account surpluses averaging about $60 billion annually in 1975-77 (see Table 10).
The surplus will drop from $73 billion in 1974 to $57 billion in 1975 and then
trend upward to $G2 billion in 1977 with the recovery in world economic activity.
We forecast that by t11e end of 7977 OPEC states will accumulate $264 billion
in foreign assets.9 Tlus sum includes $25 billion in foreign assets ($21 billion public
and $4 billion private) that OPEC states held at the end of 1973 plus $61 billion
received in 1974. The foreign exchange buildup in 1974 is $12 billion less than
the current account surplus because of lags between oil shipments and payments.
A comparable lag in payments is assumed for 1975-77.
25. The overall current account surplus of OPEC countries indicates the
magnitude of the petrodollar recycling problem but conceals sharp differences in
the prospective financial positions of individual countries. Our projections suggest
9. These foreign asset accumulations do not consider capital account movements, such as net repayments
by OPEC member states of foreign debts. Por OPEC as a whole, these Wows are expected to be relatively
small.
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TADLE 10
OPEC CUAKENT ACCOUNT
""
H u s s
1774
1975
177f,
1:177
EXPOR:PS (F.O,A.)
117.5
113.6
12fi,f
141.9
OII,
113.5
10G,2
117,5
13f1,5
NON-OII.
"
6.0
7,4
9,1
11,4
I
aPORTS~ (F.O.A.)
-33,7
-47.1
-G0,1
-73,R
TIIADE AA LANCE
R5.R
R0,5
Gfi,5
GR.1
NET SER. t PVT. TRANS.
-?,6
-6,1
-5.7
-3.7
FREi(;IIT AND INSU.RANCF.
'
-4,0
-5.7
-7,2
-8.9
INVE.STNE
NT iNCO'1F REC'TS
4.3
7.R
14.2.
IR.9
OTHER
-8.R
-10.2
-12.2
-13,7
CRANT-TYPE ASSI5TAN!'E
-4,2
-3,0
-2,2
_2,1
CIIR?BNT ACCOUNT AALANCE
73,0
57,4
59,1
E2,9
that seven OPEC states -Saudi Arabia, Iran, Kuwait, Nigeria, the United Arab
Emirates, Iraq, and Qatar -should be free of balance-of-paymcrlts constraints (sec
Tabl~a 11). The current account surplus of Saudi Arabia is expected to rise gradually
to $30 billion in 1977 - or nearly half of the OPEC total. Despite a reduced
volume of oil exports and rapidly rising imports, the Saudi surplus continues to
rise because of the substantial growth in investment income. By the end of 1977,
Saudi Arabian earnings from investment will be approaching $8 billion, or nearly
as much as the projected value of imports.
26. The remaining five countries probably will have current accounts in near
balance or a small deficit by 1977. None are likely to encounter serious
balance-of-payments problems over the next three years. To break even, Libya will
have to raise oil exports from 1.2 million b/d in 1975 to 1.7 million b/d in 1977,
as we have estimated. Expansion of Libyan oil exports will require competitive
pricing policies. In 1977, Ecuador and Indonesia are projected to run small deficits
that can easily be financed by foreign borrowing or aid receipts - or that could
be avoided by increasing oil exports a little more than we have forecast.
27. Venezuela has a projected deficit in 1977 even though we have assumed
that Caracas will tighten impor~ restrictions. The Venezuelan current account
surplus, which reached $5 billion in 1974, will plummet in 1975 and disappear
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OPCC CURRT:'NT ACCOUNT IiALANCLS
1974
1975
1976
ALGERIA
E
1.2
-2.0
-3.5
CUADOR
I
0.2
0.0
-0.1.
PIDONESIA
I
0.1
-0.6
-0.7
RAN
14.4
12.1.
12 .2
IRAQ
2.t3
3.0
3.t3
KUWAIT
7.3
6.3
7.5
LIBYA
'
2.5
0.1
0.1
1
JIGE.RIA
6.3
5.3
5.13
QATAR
S
1.6
1.7
1.9
AUDI ARABIA
'
2 5. 9
26.2
2 7. 5
U.A.E.
5.6
4.0
4.5
VENEZUF, LA
TO
5 ~ 0
1. t~
0. 2
TAL
73.0
57.4
59.1
1977
-3.2
-0.4
-1.2
11.4
4 . #3
R.1
0. 1
6.7
2,0
30. 3
5.2
-1.6
62.3
in 1976 unless Caracas cases up on its oil conservation efforts. In any case, the
expected deficit in 1977 can readily be financed by capital inflows and/or some
drawdown of reserves, which should amount to about $12 billion by the e~rttl of
1976.
28. Algeria is expected to have annual deficits of $2-$3.5 billion in 1975-77,
which we believe it will be able to cover with capital inflows.
Sensitivity of Our Conclusions to Alternative Assumptions
29. The projections in this memorandum reflect our current assessrnent of
the most likely ccurse of events, but they are clearly not the only ones that seem
feasible or even reasonable. Given the number of current account components
considered, uncertainties concerning the recovery in world economic growth, and
trends in the price of oil and other goods, numerous alternative projections can
be devised. It is important to note that t}le more plausible variations do not much
affect the projected magnitudes for OPEC countries as a group or alter the basic
conclusions.l o
10. Numerous alternative projections were made hosed on other reasonable assumptions to examine the
sensitivity of our conclusions. Only a few are presented in this memorandum, but the remainder arc machine
programmed and we can provide the results upon request.
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30. Our current account projections arc most sensitive to our estimates or
assumptions concerning oil export volume, oil prices, and thr, volume and price
of imports. Any plausible rcchtclion in the projected value :,f oil exports would
still leave the acven OPEC states with large current account surpluses and the other
five with manageable deficits. 11', for example, GPI::C were unable to increase the
nominal price of oil above the 1 January 1975 level and the real price fell by
the estimated level of inflation, the cumulative surplus for 1975-77 would be
$25 billion less than we bout estimated. In this case, the seven surplus countries
would still run larga surpluses and the other five would have somewhat larger deficits
than we have forecast (sec Appendix Table B-8). ;~audi Arabia would have a surplus
of $2C billion instead of $30 billion in 1977, while Algeria would have a deficit
of $3.8 billion instead of $3.2 billion.
31. If consuming nations undertook conservation measures that cut imports
of OPEC oil by 2 million b/d in 1970 and 4 million b/d in 1977, Saudi Arabia
plus one or more of the six other surplus countries could absorb tlt~ reduction
and still have substantial current account surpluses.l 1 As shown in an illustrative
ca'-- in Appendix Table B-6, Saudi Arabia would have a 1977 surplus of $22 billion
and Algeria a deficit of $3.7 b1111011. Although such reductions in demacd for OPrC
oil can readily be absorbed if' OPEC acts rationally in :~conornic terms, the
cooperation of Saudi Arabia and a few other key surplus producers would be
essential.
32. Expansion of ail production would make economic sense only for the
five countries with the weaker payments positions. Since we hav:: already assumed
that these countries will be operating near capacity levels, their actual production
cannot be much higher than we anticipate.
33. It is possible that the oil export volume and price will be lower than
forecast. Tltis combination, ltigltly plausible ~.rnder normal market conditions, would
be possible only if the cartel were to weaken considerably or fall apart or be
driven to lower prices by one or mc;re of the major producers.
34. Hig}ter oil prices and export volumes would only add to OPEC surpluses.
If the world economic recovery is stronger than we now anticipate, the volume
of OPEC oil exports will be larger than projected.
11. T'hc conservation policy case is roughly equivalent to the lowest possible demand estimate for OPEC
oil we could conceive of short of a world depression. If OT:CD economic growth were only 1'Y~ in 1976
and 3~7~ in 1977 our projected oil dcmana would drop by 1.6 million b/d in 1976 and 3.3 million b/d in
1977.
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35. Our current account projectia~ts arc not very sensitive to nlausiblc changes
in our assumptions concerning OPEC import volume, ror most countries, we have
projected high rates ol` import growth. Altltoush the rates could be somewhat higher
than we foresee, the current account situations of the seven surplus countries would
not be changed materially. Most of the others probably will not increase imports
much faster than estimated because we have already assumed oil output near
capacity levels. The only exception is Venezuela, which could give up its
conservation efforts and use the increased revenues to pay for more imports.
Comparison with !Jther Current Account Estimates
3C. Our projected current account surplus for Ol'EC compares as follows
with those of the OECD Sccrr.tariat and the Morgan Guaranty Trust of Ncw York.
CIA
OECD Secretariat
Morgan Guaranty
Trust
1975
1976
1977
Total
1975-77
Comparison
with CIA
Projection
57
59
G2
l78
....
53
52
4~)
154
-24
57
54
40
151
-27
37. We made two changes in the OECD and Morgan ptojec?ions to ensure
comparability and to permit disaggregation of estimated imports for comparison.
a. We have applied our price factors to the OECD data, which
arc expressed in constant 1974 dollars, to obtain values in current dollars.
b. Since Morgan Guaranty Trust does not allocate imports
between goods and services, we }taut used our data to tnakc the division
for 1974. 1'hc bank's own assumptions concet Wing growth in import
volume and changes in import prices, however, are used to project for
1975-77.
38. The $24 billion differcncc between our estimate of the OPEC current
account surplus in 1975-77 and that of ; `~e OECD reflects mainly differences in
projected non-oil exports and imports. T}te OECD estimate for non-oil exports
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in 1975-77 is $14 billion lower than ours. The Secretariat assumed that the vahw
al' non-oil exports was the sarnc in 1974 us in 1972 -- this is not so -and lhut
it would ~mpand at a compar,~tw~ly low rate through 1977,
39. 01:4;'1) projcca a 42"~~ incrcasc in OPf~C import volume in 1975, compared
with our cstirnatc~ of 25"/,,. This higher incrcasc in the first year of the projection
also raises the Icvcl of the OI:Cll estimates for 1976-77, even though its projection
of pcrccntngc chanbrs in those years is close to ours. As a result, the OECD cstimatc
of cumulative OPEC imports is $17 billion higher than ours. We doubt that the
OPCC counlrics can raise import volume by as much as 42?o in 1975, on top
of a very large incrcasc in 1974.
40. The $27 billion diffcrcncc b~~wccn our cstimatc and that of Morgan
Guaranty Trust is ciuc essentially to the bank's projection of a much larger net
outflow for the services and private remittance account, as the following tabulation
shows:
Comparison of
1975-77
Total Total with
1974 1975 1976 1977 1975-77 CIA Projection
CIA -G _5 -4 -2 .; ~
OECU Secretariat "~
-12 -4 ... .... -4
Morgan Guaranty
Trust -14 -II -11 -17 -39 -28
41. The Morgan Guaranty estimates of the net outflow for services and private
transfer also are very high compared with those of OECD, and the change in 1977
ntns in the wrong direction by a substantial ar'touni. The differences cannot be
explained by our estimates of investment income, which are similar to those of
the bank.
Postscript: The Outlook Through 1980
42. In 1978-80, the demand for OPEC oil is likely t~ decline as a result
of a surge in oil production outside the cartel. Tl~e extent of the decline in OPEC
exports is difficult to pinpoint because uncertainties about the energy market
multiply beyond 1977. W~ cannot forecast with much confidence the *ate of world
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economic growth, the impact of high energy prices, the extent of cnertr.y
conservation programs, or thL amount of non-oil energy then available. Adding
to the uncertainly is the possibility of technological breakthroughs and of
substantial production from cn~ ,y resources yet to be discovered.
43. Some things nonetheless arc clear about the 1978-80 period.
? In 1978 or 1979, world economic expansion will slow from the rapid
pact of the recovery phase, moderating the growth in energy demand.
? 13y 1980, oil production .in the Nortli Sca, Alaska, Egy7t, Mexico,
Malaysia, I'cru, China, and other non-OPEC areas will total perhaps
7-8 million b/d more than at present. Most of this new prodU~ction will
come in after 1977, cutting substantially into OPEC's market share.
? High prices will be having more impact on oil demand than at present.
Ncw autos will be more efficient energy-users, energy requirements for
space-heating will be held down by higher insulation standards, and some
industrial processes will have been modified to cut energy consumption
per unit of output.
44. Working with very conservative assumptions, we obtain a projected
demand for OPEC oil in 1980 of about 27 million b/d - 2 rr~ illion b/d less than
estimated t'or 1977. We believe that a considerably larger drop ~s likely. A demand
of roughly 24 million b/d is indicated, if one assumes an OECD-wide economic
growth rate in 1978-80 of 4.5% -the long-term average - and a continued GNP
elasticity of ern -gy demand of 0.7. ]n its long-term energy assessment, the OECD
Secretariat projects oil imports of member countries at 22 million b/d in 1980.
Adjustment of this Forecast to accouni for imports of OPEC oil by other countries
and for oil exports by non-OPEC countries raises the figure to about
25 million b/d.
45. The prospective need for a sizable cut in OPEC exports by 1980 suggests
that the countries will encounter problems in prorationing production. OPEC
expenditure levels will then be much higher than at present, and almost all the
producers will have much less flexibility than now to reduce output. Only Saudi
Arabia and Kuwait are certain to still have substantial surplus revenues. Several
countries probably will be incurring current account deficits.
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46. We Hunk it likely that OPEC will materially increase the real price of
oil toward the end of the decade; so that no member will feel compelled to raise
exports at a time of declining demand for OPEC oil. Developed countries will
still depend on OPEC states for about half of their oil supply in 1980 and have
little short-term alternative fo paying more for? it. IIy that tame industrial countries
will have adjusted in many ways to the new level of energy prices and OPEC
probably will feel it has been reasonable in merely maintaining the real price for
five years or so. Although a few countries may raise oil output in spite of the
ebbing demand for OPEC supplies, we believe that most members will see that
it is very much in their interest to reduce output while raising prices.
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TREE WORLD: PROJEC'.CED OIL DEPiAND, PRODUCTT.ON
AND IMPORTS, ].975
*1ILLION B/D
TOTAi. TREE UNITED WESTERN
WORLD S,,~A,,~S EUROPE JAP OTHER
21
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 Approved For Release 2001/08/~~I~-F~BI~86T00608R000500180003-6
~NERr,Y SUPPLY AND DEMAND IN MAJOR CONSUMING COUNTRIES
PIILLIONS B/A OF OiL EQUIVALENT
1973
1974
1975
1976
197
CONSUMPTION
35.6
34.9
35.0
36.1
37.6
OF WHICH OIL
17.2
16.7.
16.7
17.2
18.4
DOMESTIC PRODUCTION AND
NET NON-OIL IMPORTS
29.7
29.1
29.0
29.4
29.6
OF WH~H
J
OIL
11.3
11.0
10.7
10.5
10.4
NATURAL '." ^.S
11. 3
10. 8
10. 4~
10.1
9 . 7~
COAL
6.2
6.2
6.4
7.0
7.5
HYDRO
0.5
0.6
0.6
0.6
0.6
NUCLEAR ~
0.4
0.5
0.9
1.2
1.4
OIL IMPORT P.EQUIREPIENTS
5.9
5.7
6.0
6.7
8.0
WESTERN EUROPE
23.5
23.6
23.4
24.1
25.2
OF WHICH OIL
15.0
14.4
14.1
14.5
15.1
DOMESTIC PRODUCTION AND
8.8
9.6
9.9
10.7
11.7
NET NON-OIL TMPORTS
OIL
0.3
0.4
0.6
1.1
1.7
NATURAL GAS
2.6
2.9
3.2
3.5
3.8
COAL
5.2
5.6
5.4
5.4
5.5
HYDRO
.6
.6
.6
.6
.6
NUCLEAR
.1
.1
.l
.1
.2
OIL IMPORT: REQUIREMENTS
14.7
14.0
13.3
13.4
13.4
CONSUMPTION
6.9
6.9
6.8
7.0
7.4
OF WHICH OIL
5.4
5.2
5.0
5.1
5.4
DO~~~T~~NP~Z~,PU~~~B~T~ND
1.5
1.7
1.8
1.9
2.0
NATURAL vGAS
0.1
0.2
0.2
0.2
0.3
COAL
1.1
~.l
1.2
1.2
1.2
HYDRO
0.3
0.3
0.3
0.3
0.3
NUCLEAR
---
0.1
0.1
0.2
0.2
OIL IMPOR:~ P,EQUTREP4ENTS
5.4
5.2
5.0
5.I
5.4
INCLUDING NATU'.tAL GAS LIQUIDS AND PROCESSING GAIN
FEA ESTIMATES
~./ PROJECTED FROM UNPUBLISHED FPC ESTI?MATES FOR 1980
NATIONAL COAL ASSOCIATION ESTIZ~ATES
PROJECTED ON BASIS OF 7$ OUTPUT GROIdTH
NET IMPORTS FOR CONSU}OPTION; E}:CLUDES STOCK CHANGES
22
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 Approve
r F}r~l 2001/08/21 :CIA-RDP86T00608R00050
U d U r-I M tV ", tom. o~ M ~D ~/1 r1 rn 0~ O
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 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
INCLUDING MILITARY GOODS.
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11Vl.LUL1NCi MILITARY GOODS
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27
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IRAQ: CURRENT ACCOUNT
EXPORTS (F . 0 . B . )
OIL
NON-OIL
r~~pnRTS* cF.o.B. )
TRADE BALANCE
Nr'T b'E~ . t PVT. TRANS .
FREIGHT AND INSURANCE
.INVEST'dEA1T INCOME REC' TS
OTHER
GRANT-TYPE ASSISTANCE
CURRENT ACCOUNT BALANCE
1974 1975
6.2 7.7
6.1 7.5
0.1 0.2
-2.7 -4.2
3. 5 3. 5
-0.2 -0.3
-0. 3 -0. 5
0.2 0.5
-0.1 -0.2
-0.4 -0.2
2.8 3.0
BILLION US $
1976 7977
9.6 11.#~
9. 3 11.x;
0.3 0.4
-5.3 -6.7
4.3 5.2
-0.3 -0.1
-0.6 -O.R
0.7 1.1
-0.3 -0.4
-0.2 -0.2
3.8 4.9
* INCLUDING MILITARY GOODS.
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
KUWAIT: CURRENT ACCOUN'P
aILLION
US $
1974
1975
1976
1977
EXPOR TS (F.O.A.)
9.4
7.9
8.f
9.~
4
8
1
9
7.5
8.0
.
OIL
NOAI-OIL
.
0.3
~.4
0.6
~?6
6
IP~PORTS* (F.O.A. )
-1.7
-2.0
-...3
-2.
4
6
TRADE BALANCE
7.7
5.'f
G.3
.
~
'
NET' SER. + PVT. TRANS.
0.~E
1.0
1.5
?.
'i
FREIGHT AND INSURANCE
-0.2
-0.2
-0.3
-0.
6
2
INVEST^lENT INCOAfE RF,C' TS
0. 9
1. 5
2.0
?
0
?
-0.3
-0.3
-0.2
-
.
OTHER
GRANT-TYPE ASSISTANCE
-0.7
-0.5
-0.3
-0.3
U
~
CURRENT ACCOUNT BALANCF,
7.3
6.3
7.5
?
* INCLUDING MILITARY GOODS.
Approved For Release 2001/08/21: C21~-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
LIBYA: CURRENT ACCOUNT
_ .
BILLION US $
1974
1975
1976
1~J77
EXPORTS (F.O.B.)
6.9
5.4
6,9
A, S
OIL
6.A
5.3
5.8
A
4
NON -OIL
0. 1
0. 1
O, 1
.
0. 1
IPfPORTS* (F.O.R,)
-3.0
-4. 1
-5.2
-6. 5
TRADF, BALANCE
3.9
1.3
1.7
1.:3
NF, T. SER. + PVT. TRANS.
-1.0
-1.0
-1.4
-1. 5
FRF,ICHT AND INSURANCF,
'
-0.4
-0.5
-0.6
-0.8
.I
NVEST,ti1ENT INCOME RF, C' TS
0. 2
0 . 4
0 . 4
0 , 4
OTf1ER
-0. 9
-0 . 9
-1. 1
-1. 1
GRANT-TYPE ASSISTANCE
-0. 3
-0. 2
-0 ~ 2
_p . ?
CURRENT ACCOUNT BALANCE
-~
2.5
0.1
0.1
0.1
INCLUDING MILITARY GOODS.
Approved For Release 2001/081:CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
INCLUDING MILITARY GOODS.
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
TABLE A?-12
QA'PAR: CURRENT ACCOUNT
BILLION US $
1974
1975
1976
19
77
EXPORTS (F.O.B. )
0I T.
1. 9
2 ~ 0
2. 2
_
2
3
NON-OIL
1'0
2.0
~?2
.
2.A
IMPOR
0.0
0.0
0
0
0
0
TS* (F.D.B. )
TRAD
-0.3
-0.4
.
-0
4
.
-0
5
E BALANCF,
NE2' SER
~
1.6
1. f,
.
1
8
.
1
7
. + Pi
T . TRANS .
FREI
H
0.0
0.1
.
n,3
.
0
4
G
T AND INSURANCE
INVEST~r
0.0
0.~
-0.1
.
-0
1
ENT INCOME .RF,C'TS
OTHER
0.1
~?~
0.4
.
0. 5
G
~ANT
0.0
0.0
0
0
0
0
.
-TYPE ASSISTANCE
CURRE
'
-0.1
-0.1
.
-0.1
.
-0
a
I
lT ACCOUNT BALANCE
i. f
1. 7
1. 9
.
.
2. 0
IiQCLUDING MILITARX GOODS
32
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
1Nl:LUll~NG MILITARY GOODS.
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
UAB: CURRENT ACCOUNT
BILLION US $
1974
197_
1976
1977
F,XPORTS (F.O.B.)
7.6
6.2
7.2
9
6
~' ~
5. 6
G. 4
.
7
7
NOT -O.T L
~
0..,
0.6
0.8
.
0
9
Tr:fPORTS* (F.O.B.)
-1.4
-2.0
-2.8
.
-3
7
T,'~ADE BALANCE
6. 2
4. 2
4. 5
.
4
9
NF,T SER. + PVT. TRANS.
-0.1
0.2
0.4
,
0
6
FREIGHT AND INSIIRANCE
-0.2
-0.2
-0.3
.
-0.4
INVESTMENT INCOMF. REC'T.S
0.3
0.7
1.0
4
1
OTHER
-0.2
-0.2
-0.3
.
-0
3
GRANT-TYPE ASSISTANCE
-0.5
-0.4
-0.3
.
-0.3
CURRENT ACCOUNT BALANCE
5. 6
4. 0
4. 5
5.
INCLUDING MILITARX GOODS.
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
VENEZUELA: CURRENT ACCOUNT
-~- -- - -
BILLION
US $
1974
7.975
1976
1977
EXPORTS (F.O.B.)
10.7
8.g
g~5
9
3
OIL
10.3
8.4
9
0
.
8
8
NON-OIL
~
0.4
0.5
.
0.5
.
0
5
tl
1PORTS* (F.O.B.)
-4.6
-6.4
-8.0
.
-9
4
TRADF, BALANCE
NF
6.1
2.5
1.4
.
0
0
,T SER. + PVT. TRANS.
-1.0
-0.9
-1.1
.
-1
4
FREIGHT AND INSURANCE
-0.6
-0,8
-1.0
.
-1
1
INVF,STMENT INCOME REC'TS
0.3
0.6
0
7
.
0
6
OTHER
-0.8
-0.8
.
-0.8
.
-O
g
G.SANT-TYPE ASSISTANCE
_0. 1
_p ~ 2
_0, 2
,
-0
2
CURRENT ACCOUNT BALANCE
-~
5.0
1.4
0,2
.
_g,g
INCLUDING MILITARY GOOBS.
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
ASSUMING 1 MILLION B/D SAVINGS IN 1976 AND
2 MILLION B/D SAVINGS IN 1977 FROM GOVERNMENT
CONSERVATION MEASURES
1974
1975
1976
1977
1.
ALGERIA
893
855
y50
945
2.
ECUADOR
129
165
160
155
3.
INDONESIA
1175
1211
1391
1470
4.
IRAN
5770
5365
5320
5495
5.
IRAQ
.1606
1880
1960
2140
6.
KUWAIT
2560
1975
1970
1965
7.
LIBYA
1451
1210
1455
1700
B.
NIGERIA
2198
1935
2030
2125
9.
QATAR
513
497
495
490
10.
SAUDI ARABIA
8462
8170
7310
7150
11.
U.A.E.
1675
1390
1385
14;?0
12.
VF,NEZUELA
2707
?110
1390
1865
TOTAL 29139
26763
26416
?.6980
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
* INCLUDING MILITARY GOODS.
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
CASE 1: ASSUMING 1 MILLION B/D SAVINGS IN 1976 AND
2 MILLION B/D SAVINGS IN 1977 FROM GOVERNMENT
CONSERVATION MEASURES
BILLION US $
1974
1975
1976
1977
----
----
----
----
1.
ALGERLA
1. 2
- 2. 0
- 3. S
- 3. 7
2.
ECUADGR
0.2
0.0
-0.1
-0.4
3.
INDONESIA
0.1
-0.6
-0.5
-1.2
4.
IRAN
14.4
12.1
11.7
11.8
5.
IRAN
2.8
3.0
~,9
2.9
6.
KUWA.T.T
7.3
6.?
7,5
3.1
7.
LIBYA
2.5
0.1
0.1
0.]
8.
NIGERIA
6. 3
5. ?
5. ^
5. 3
9.
RATAR
1.6
1.7
1.9
?.0
i0,
SAUDI ARABIA
25.9
26. ^
25.?
25. 0
11.
U.A.E.
5.6
4.0
4.1
4.2
12.
VENE7UELA
5.0
1.4
-0.3
-2.1
TOTAL 73.0
~?.4
54.9
52.9
Approved For Release 2001/08/21: C~~--RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
CASE 2: ASSUMING 2 MILLION B/D SAVINGS IN 1976 AND
4 MILLION B/D SAVINGS IN 1977 FROM GOVERNMENT
CONSERVATION MEASURES
1974
1975
1976
1977
1.
ALC,ERIA
893
855
900
9~~5
2.
ECfIADOR
129
165
160
155
3.
INDONESIA
1175
1211
1291
1320
4.
IRAN
5770
5365
5120
4995
5.
IRAQ
1606
1880
1860
1940
6.
KUldAIT
2560
1975
1770
1765
7.
LIBYA
~
1451
1210
1455
1700
8.
NIGERIA
2198
1935
1930
1925
9.
QATAR
513
497
495
490
10.
SAUDI ARABIA
8462
8170
7060
6600
11.
U.A.E.
1675
1390
1385
1280
12.
VENEZUELA
2707
2110
1990
1865
TOTAL ~ ~
29139?
26763
254'! 6
24980
40
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
CASB 2: ASSUMING 2 MILLION B/D SAVINGS IN 1976 AND 4 MILLION B/D
SAVINGS IN 1977 rROM GOVBRNMGNT CONSRRVATION MEASURBS
-- -,-
D t .
IQS1
1
S
~
1974
1975
1976
,
..
.
.
1977
F.XPO.RTS (F.O.A.)
119.5 ~
113.6
118.2
124.1
O.tL
113.5
106.?
109.1
112.7
NON-OIL
6.0
7.4
9.1
11.4
IAIPORTS* (F.O.B.)
-33.7
-47.1
-60.1
-73.8
TRADF. BALANCE
85.B
66.5
58.1
50.2
NF.T SE?. + PVT. TRANS.
-8.6
-6.1
-5.3
-4.6
FR F, .TC.HT AND INSURANCE
-4.0
-5.7
-7.2
-8.9
.tNVESTI!1ENT IIUCOMF' RFC'TS
4.3
9.8
13.9
17.5
OTHER
-8.8
-10.2
-12.0
-13.3
GRANT-TYPE ASSISTANCE
-4.2
-3.0
-2.2
-2. ?.
CU.R,4ENT ACCOUNT BALANCE
73.0
57.4
50.6
43.5
* INCLUDING MILITARY GOODS
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
OPEC CURRENT ACCOUNT BALANCES
CASE 2: ASSUMING 2 MILLION B/D SAVINGS IN 1976 AND
4 MILLIOPI B/D SAVINGS IN 1977 FROM GOVERNMENT
CONSERVATION MEASURES
1974
1975
1976
1977
1.
ALGERIA
1.2
-2.0
-3.7
-3.7
2.
ECUADOR
0.2
0.0
-0.1
-0.4
3.
INDONESIA
0.1
-0.6
-0.9
-1.8
4.
IRAN
14.4
12.1
10.9
9.5
5.
.IRAQ
2.8
3.0
2.5
?..0
6.
KUflAIT
7.3
6.3
6.6
7.2
7.
LIBYA
2.5
0.1
0.1
0. 1.
8.
NIGERIA
6.3
5.3
5.3
4.9
9.
QATAR
1.6
1.7
1.9
2.0
10.
SAUDI ARABIA
25.'3
26.2
24.1
22.5
11.
U.A.E.
5.6
4.0
4.1
3.3
1? .
VENEZUELA
5. 0
1.4
-0. 3
-2. 1
TOTAL ~
73.0
57.4
5~.6
43.5
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
* INCLUDING MILITARY GOODS.
Approved For Release 2001/08/2143CIA-RDP86T00608R000500180003-6
 Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6
TABLC B-8
OPRC
CURRRNT ACCOUNT BALANCIIS
CASB 3; ASSUMING CONTINUATION Or NOMINAL OIL PRICCS
AT THL 1975 LLVIIL
------- B r T. r. r O N U 4 $
1974
1975
1976
1977
1.
ALGERIA
1.2
-2.0
-3.8
-3
8
2.
ECUADOR
0.2
0.0
-0.2
.
-0
5
3.
INDONESIA
'
0.1
-0.6
-1.1
.
-2
0
4.
.I
RAN
14.4
12.1
10.4
.
8
4
5.
IRAQ
2.8
3.0
3.1
.
3
4
6.
KUrJAI.T
7.3
6.3
6.9
.
7
0
7.
LIBYA
2.5
0.1
-0.4
.
-0
9
8.
NIGERIA
6.3
5.3
5.1
.
5
3
9.
QATAR
1.6
1.7
1.8
.
1
7
10.
SAUDI AI;ABIA
25.9
26.2
25.0
.
25
7
11.
U.A.E.
5.6
4.0
4.0
.
4
2
12.
VENEZUELA
S
0
1
4
.
'~
.
.
-0.5
-2
7
TOTAL
73.0
57.4
S0. 3
.
46 . 0
44
Approved For Release 2001/08/21 :CIA-RDP86T00608R000500180003-6