The question will not be on any formal agenda.
But when two groups of powerful leaders gather on opposite sides of the globe this week, both will know the real issue facing them: Must the entire non-Communist world go through a repetition of the oil-fired recession of 1974-75? The answer will not be clear even when the final gavel ends the OPEC meeting in Geneva and the economic summit in Tokyo. But the prospects are cheerless: at best, a slowdown in global growth, accompanied by more inflation; at worst, an outright recession—also accompanied by more inflation. Already, the downturn-that-might-be has picked up a name. Washington economists are calling it Khomeini's Recession—after the Ayatullah Ruhollah Khomeini, whose Iranian revolution began the oil shortages and rocketing prices that are causing world economic anxiety.
Americans last week began getting an unpleasant taste of what lies ahead. Gasoline lines, which once seemed a temporary California phenomenon, were snaking through the suburbs of Washington and streets of Manhattan, and by last week had spread all up and down the Eastern seaboard. Seven states—Connecticut, Florida, Maryland, New Jersey, New York, Texas and Virginia—and the District of Columbia had to begin odd-even allocation. Independent truckers, who charge that rising fuel prices are depriving them of a livelihood, started a strike that soon led to food shortages, scattered violence and threats of worse to come. Although the Department of Energy had contributed to the gas shortage by urging oil companies to build up their depleted stocks of heating fuel, it was disclosed last week that home fuel prices will be a paralyzing 80¢ per gal. by next winter (up almost 50% from last winter) and there will be shortages too.*
The Ayatullah will not be on hand to view the latest round in this protracted conflict, but his Finance Minister, Ali Ardalan, will sit down in Geneva on Tuesday with his opposite numbers from the other twelve nations in the OPEC cartel.
Brushing aside warnings that they cannot in the long run prosper by gouging their customers, the OPEC ministers in effect have already decided to pile another price increase on top of the 35% rise that they have put into effect since December. The only question is how large it will be. Prevailing guess: the "marker" price will go up to $20 per bbl., from $14.54 now, bringing the total increase since December, when the price was $12.70, to about 50%. Still unsettled is the question of whether that will be a unified charge or merely a base to which individual OPEC members will add surcharges; such surcharges now bring the average OPEC price to around $17 per bbl.