OPEC'S TOUGH QUESTION

Ministers of the Organization of Petroleum Exporting Countries should listen closely when they meet this week in Vienna. The sounds they hear will be waves of modernity pounding against their economic walls.

The usual questions raised about OPEC meetings have relatively easy answers this time.

What will OPEC do with its group production quota, now at 24.52 million b/d? Extend it.

Will some members still violate quotas? Probably.

How long will this quota action last? Until falling crude oil prices force the group to cut output.

A tougher but more important question: How long will OPEC's biggest producers submit rather than adapt to modern economic pressures? This week would not be too soon for them to start seeking an answer.

MARKET DRUBBINGS

OPEC takes regular drubbings in two crucial markets, in both cases by capitulation. The first such market is the one for crude.

OPEC's biggest Persian Gulf producers refuse to trade crude in significant volume. They sell crude under long term contracts and stipulate that buyers not resell the oil Most prices under these contracts are linked to prices for Brent crude from the North Sea, which in turn depend greatly on futures prices on the New York Mercantile Exchange.

By refusing to trade in physical or derivatives markets, OPEC producers forgo the opportunity to protect themselves against unfavorable price moves. They thus take whatever comes their way from a market that must value their high volume crudes in relation to physically less significant crudes traded in distant markets.

OPEC's gulf producers have reasons for acquiescing in this often costly way to the results of trading by others. Those reasons have to do with culture and politics, certainly not economics. Meanwhile, the rest of the world responds to economics and, at least for now, squeezes OPEC crude out of the market.

OPEC members probably will have something to say about this in Vienna. They have criticized the U.K. and Norway in the past for not helping the exporter's group limit output to support price. When they do they reveal a failure to understand an important point made at the American Petroleum Institute annual meeting last week by economic analyst John Rutledge: The focus of global competition in general has shifted from market share to capital.

Oil is no exception. The market for international capital is the other arena where OPEC's biggest producers take beatings by default.

The U.K. and Norway are producing increasing volumes of oil because doing so serves their economic interests and because they have taken deliberate steps to attract the capital they need to accomplish the task. Although OPEC tends to reserve its criticism for those two producers, countries elsewhere, especially developing countries, have chosen the same route to prosperity.

In contrast, Persian Gulf heavyweights Saudi Arabia and Kuwait continue to fund oil and gas projects internally, protecting resources they view as sovereign from exposure to outside capital. So money that would certainly find their resources attractive goes instead not just to the North Sea but also to Asia, Latin America, Africa, the former Soviet Union, and other places welcoming foreign investment in resource development. And production is rising around the world, filling every new increment of demand in a slowly but steadily growing market.

PRESSURES BUILD

In theory, OPEC's gulf producers can wait this out. They will have massive production potential when output from the upstarts is well into decline. But the wait may be longer than anyone thinks. Technology has yielded more than a few surprises in recent years.

Waiting, however, may not be an option for the gulf stalwarts. As the Nov. 13 bombing in Riyadh showed, political systems in the world's most vital oil producing region are under stress. For problems like that, self-induced economic pressure is no solution.