…and fuel prices

In response to the Iraqi-manufactured crisis in the Persian Gulf, OPEC is revealing a pragmatic side that could produce temporary benefits for U.S. consumers of heating oil and gasoline.

Even as American reservists were mobilizing Monday to buttress this country’s military presence in Saudi Arabia, OPEC ministers in Vienna were refining the semantic obstacles to an agreement to increase petroleum production, a decision that would bolster the morale and economic psychology of a nation teetering on recession.

The 4 million barrels a day lost to the Iraq-Kuwait blockade is only a small fraction of total domestic U.S. consumption, but it is enough to create wild instability in the petroleum market. The OPEC nations’ commitment to consider offsetting that loss with greater production already has eased rampant speculation in petroleum (key crude-oil prices dropped nearly $4 a barrel Monday from a weekend high of $30).

But this is not OPEC philanthropy. These countries are helping themselves by averting a severe U.S. recession that could be produced by a petroleum shortage and dramatically higher energy prices. A recession of that magnitude would be bad for OPEC’s business.

In the mid-1970s, OPEC learned that excessive greed might kill the goose. At that time, just as America was about to invest heavily in alternative energy projects, OPEC opened the spigot, lowered its prices and pacified this petroleum-addicted market. OPEC learned from that experience. America didn’t.