GROUP EYES END TO PRICE, MIDDLE EAST UPSETS

An international effort to stabilize Middle East politics in the near term and oil prices in the long term may be taking shape.

A group of petroleum industry leaders and former high level government officials met last month to discuss a multinational response to problems in the Middle East as part of a push for oil price stability.

The group based its suggestions on views aired at the first annual conference of the Centre for Global Energy Studies (CGES) in London last October, citing "five grave crises that have led to severe convulsions of the price of oil" in the past 17 years.

In a communique, the group called for "every effort" to deal with security of oil supply and to stabilize oil prices around "an economically optimum level that is neither too high to discourage consumption nor too low to deter investment in the oil industry."

The group also gave qualified support to Venezuelan President Carlos Andres Perez's recent proposal for a conference between oil producing and consuming nations aimed at promoting price stability.

CGES is a policy study group founded and headed by Ahmed Zaki Yamani, former oil minister of Saudi Arabia. Yamani served as chairman for the discussions.

Participants included Valery Giscard d'Estaing, former president of France; Andre Giraud, former minister of Defense and minister of Industry of France; A.M. Hegazy, former prime minister of Egypt; Peter Holmes, chairman of Shell Transport & Trading Co.; Gianni de Michelis, foreign minister of Italy; James Schlesinger, former secretary of Energy and secretary of Defense of the U.S.; and Pierre Trudeau, former prime minister of Canada.

WHAT IT SAID

The group noted that of the five oil crises of the past 17 years, all but one were caused by political turbulence in the Middle East rather than by market fundamentals.

"The sharp price increases involved have not only damaged the health of the world economy by raising inflation and lowering economic growth rates everywhere but have also been detrimental to the long term interests of oil producers," it said.

While supporting the Venezuelan president's proposal for meetings between oil producing and consuming countries, the group said international oil companies should participate because they form a vital link between producers and consumers of oil.

But any effort to stabilize oil prices must also consider political instability in the Middle East. And neither military action nor peaceful discussion taken in response to "exigencies of the moment" will stabilize regional politics long term.

Prospects for lasting solutions to the area's problems would improve, the group said, through "widespread espousal of democratic traditions, a more equitable distribution of wealth, greater protection of basic human rights, and a heightened respect for the sovereignty of territorial integrity of the states in the area."

The group said any international effort to solve the Middle East's current and future problems should aim at strengthening regional security immediately and eliminating causes of instability, "such as the Palestinian problem and the lack of democratic traditions in the area, to name but a few."

Two ways to achieve those objectives, it said, would be to establish a "regional security system" and create an international fund to provide economic assistance to the region's poor countries.