263. Editorial Note
On July 24, 1967, as the crisis abated, Iraq announced that it would resume shipments to all countries except the United States, United Kingdom, and West Germany. (Item for the Katzenbach report, July 27; Department of State, E Files: Lot 71 D 84, FSV Facilitative Service—1967) But the major suppliers to the United States continued to hold back due to fears of the political climate in the Arab world. When questioned, Saudi Oil Minister Yamani told U.S. officials that the U.S. position at the United Nations was making it difficult for Saudi Arabia to resume normal shipments: “Yamani said political climate needs to improve before SAG can risk lifting embargo.” (Airgram A–41 from Jidda, July 26; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 17 SAUD US)
On August 9 Libyan Petroleum Minister Muusa confirmed to Embassy officials that his country had resumed direct export of oil to West Germany after the company agreed not to publicize the shipments. He explained that resumption of direct shipments to the United States and United Kingdom was still unlikely: “Indirect shipments via Canada and Ireland being encouraged, however.” According to Muusa, the oil producers were unhappy that Arab Foreign Ministers had referred a decision on a proposal for a 3-month total oil boycott to all Arab states rather than just exporters. (Telegram 568 from Tripoli, August 10; ibid., PET 17–1 LIBYA) Despite the boycott, Abu Dhabi was exporting to the United Kingdom, and Bahrain was shipping to both the United States and the United Kingdom, while Shell was about to begin unrestricted production in Muscat and Oman. (Circular airgram CA–1232, August 12, 1967, ibid., PET 17–1 ARAB)
On September 1 the Arab Heads of State Conference in Khartoum adopted a resolution calling for the resumption of production. Since export, not production, had been halted earlier, it was interpreted to mean that the embargo was over. For text of the resolution, see [Page 470] American Foreign Policy: Current Documents, 1967, pages 590–591. An item for Under Secretary Katzenbach’s September 1 report notes: “The three moderate producers seem to have had to pay heavily for this and perhaps other concessions; Kuwait has agreed to an ‘annual’ payment of $154 million, Saudi Arabia $140 million and Libya $84 [million] to the ‘victims of Zionist aggression’ namely Egypt, which will get $266 million and Jordan which will get $112 million.” (Department of State, E Files: Lot 71 D 84, FSV Facilitative Service—1967)
When King Faisal returned from Khartoum on September 2, he announced that Saudi Arabia would resume oil shipments to all countries “without exception.” (Telegram 874 from Jidda, September 2; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 17–1 SAUD) In Libya, the oil companies were unofficially informed that the embargo was lifted that same day. (Telegram 941 from Tripoli, September 5; ibid., PET 17–1 ARAB)