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The recent decline in oil prices may mean that a combination of market forces and increased production in Iran and Iraq will make it impossible for OPEC to maintain high prices and present industry and government with a new set of energy issues. The present situation is the result of reduced world demand following the 1979 to 1980 price increase, while long-term contracts doubled in price because of lower production levels and world stocks grew in anticipation of another supply disruption. This review of the world market since 1972 cautions that the Persian Gulf remains an area of political instability. It concludes that a real price decline will lower inflationary pressures, revenues from the Windfall Profit Tax, the gap between oil and natural-gas prices, and the cost of filling the Strategic Petroleum Reserve. The government will then need to determine the optimum level of dependence on Persian Gulf imports. 3 tables. (DCK)