Higher gasoline prices may lie ahead in the first few months of 1989 as the result of a tentative deal worked out by OPEC nations in Vienna this week. The agreement would cut oil production by about 20 percent and help dry up the oil glut that has held prices down.
If the plan takes effect - the key is whether Iran will accept Iraq having equal production quotas - the OPEC oil ministers expect that prices will climb to $18 a barrel within a few months. Current prices are about $13 to $14 a barrel and have been as low as $11 a barrel.A world price of $18 a barrel would translate roughly into a 10-cent per gallon price hike for U.S. motorists.
The concern is not this particular increase in oil prices, but the warning it sends about OPEC's comeback and the increased power it represents for the 13-nation cartel.
In recent years, OPEC had lost the stranglehold it once had on the world's oil jugular - a grip that had sent oil prices past the $30-a-barrel mark. But with the end of the Iran-Iraq war, OPEC's clout may once again become an international force to be reckoned with.
That is particularly alarming since the U.S. is even more dependent on imported oil than it was in 1973 when OPEC was formed and shocked the world with huge increases in the price of oil.
If OPEC can make this week's deal stick, the accompanying price hike may be just a hint of things to come, particularly as world oil reserves are gradually depleted in the next few decades.
A plentiful world supply of oil at relatively low prices has made many Americans complacent, as if the situation would last forever. Auto manufacturers are building bigger cars and failing to meet mileage standards. The use of oil products has risen, and the public sense of U.S. vulnerability seems to have faded.
But the danger remains. As long as Americans are increasingly profligate in their use of gasoline, the country will continue its slide toward more imported oil - both hurting the trade deficit and putting the U.S. deeper in OPEC's pocket.
At this rate, the time will soon come when OPEC will once again be able to call the tune and America will have to dance to it.