KUWAIT -- Sheikh Ahmed Zaki Yamani, the most powerful figure in OPEC who helped engineer the 1973 Arab oil embargo and oversaw an eventual 1,209 percent rise in oil prices, was fired Wednesdayas Saudi Arabia's oil minister, the state-run Saudi radio said.
Hisham Nazer, now the minister of planning, was appointed to replace Yamani as acting minister of petroleum and mineral resources apparently until a full Cabinet minister could be appointed to the post, the radio said in a broadcast early Thursday.
No reason was given for Yamani's sudden dismissal.
There was widespread speculation among oil analysts that Yamani, the most visible minister in the oil cartel, was removed because he objected to the kingdom's role as the architect of OPEC's eight-month pricing war that drove down the price of oil to less than $10 a barrel in late July from an average $28 a barrel last December.
The Saudi family agonized for months in 1985 before deciding that summer to abandon its role as OPEC's price defender because fellow cartel members were overproducing and undercharging for their oil at the kingdom's expense.
Persian Gulf sources said Yamani opposed any action that would make the Saudis responsible for lower oil prices and politically vulnerable in the Arab world.
Yamani kept his post and prevailed in the summer of 1985 in a royal family struggle to alter oil policy.
The royal family split into an aggressive faction advocating pumping more oil even at cheaper prices to increase overall revenue and a second faction calling for keeping production low but hoping prices would rise over the long run.
But Yamani eventually was overruled. There is still sharp division within the royal family over the wisdom of the new Saudi oil plan.
The firing, announced in the name of King Fahd and monitored in Kuwait, said: 'After examining the bylaws of the Saudi Arabian Cabinet, I decree the following: We order to relieve Mr. Ahmed Zaki Yamani from his post and hereby appoint Minister of Planning Hisham Muhieddin Nazer to take over his duties in addition to those of his own.'
'It's no secret that King Fahd is not favorably disposed toward Yamani,' a former Western adviser to the kingdom said recently. 'They have a correct relationship but not a close one.'
Yamani, a Saudi commoner, earned a law degree in Cairo and studied international law at New York University and Harvard. Crown Prince Faisal made him one of his closest advisers at age 30.
Yamani became oil minister in 1962 and after the 1967 Middle East war he helped form the Organization of Arab Petroleum Exporting Countries, or OAPEC, which successfully pressed Western oil companies for greater control over oil.
After Israel's victory in the 1973 Middle East war Saudi Arabia - by far the biggest producer in OPEC -- followed Libya and Abu Dhabi and declared an oil embargo on shipments to the United States.
OPEC then more than tripled its prices from $2.75 a barrel to $11.51, where it peaked after the embargo was lifted in March 1974 with the help of Yamani and at the urging of the United States.
The price then rose moderately until 1979, when the Iranian revolution cut off that country's supply and OPEC nearly tripled its price from $13.34 a barrel to an all-time high of $36 a barrel in 1981. In all, from 1973, the price of a barrel of oil rose 1,209 percent - from $2.75 in October 1973 to $36 at the end of 1981.
This dramatic price rise marked the start of OPEC's decline, because it prompted Western oil-consuming nations to conserve energy and shift to alternative energy sources.
Yamani, born in 1930, was known as a moderate in OPEC, trying to persuade hard-line states that each boost in prices beyond reason was pushing the economy of the West toward ruin.
Oil industry sources in New York who asked not to be identified said Yamani's ouster came as a complete surprise.
'Our people had spoken to Yamani five hours before the announcement, and there was no sign of anything untoward,' said one industry source. 'It looks like his removal was very sudden.'
Oil industry officials said Saudi Arabia is not likely to alter its oil policy under Nazer.
'Nazer is a highly efficient technocrat responsible for the Saudis' enormous five-year plans,' said one industry official. 'He's a much more down-to-earth fellow than Yamani.'
Kenneth Miller, editor of New York-based Petroleum Intelligence Weekly, said, 'We feel there's no dramatic oil policy change likely to result' from the replacement of Yamani.
OPEC was created on Nov. 14, 1960, in Baghdad, Iraq, by six oil-producing states intent on getting larger royalties from major Western oil companies that took the oil out of the ground and shipped and marketed the product.
Originally founded by Iran, Iraq, Kuwait, Libya, Saudi Arabia and Venezuela, the cartel expanded to 13 member nations, including Qatar, Indonesia, the United Arab Emirates, Algeria, Nigeria, Ecuador and Gabon. In 1960 OPEC oil sold for about $1 a barrel.
