Foreign Relations of the United States, 1969–1976, Volume XXXVII, Energy Crisis, 1974–1980

163. Telegram From the Department of State to the Embassy in Venezuela¹

Washington, September 28, 1978, 2010Z.

247461. Subject: Message to President Perez re Oil Prices.

1. Chargé is instructed to seek appointment with President Carlos Andres Perez to make following points on behalf of President Carter.

2. Talking points are as follows: Begin text: It has come to our attention that Venezuela is seeking to persuade other OPEC countries to agree to an immediate increase in oil prices and a further increase at the beginning of next year.

3. This would be a most inopportune time for such a step. It would damage the global economy, still struggling to emerge from a period of recession. The effect would be magnified by the uncertainties that would flow from a price increase which appears unwarranted by current market conditions.

4. Perhaps most important of all a rise in oil prices at this time would place further pressure on the dollar. This would not be in anyone’s interest, and would be particularly unfortunate when US Government is taking vigorous measures both to strengthen the dollar and to strengthen the international monetary system. Our Congress will, in the next few days, pass legislation that will bring into effect the bulk of energy program that you, President Carter and other world leaders have felt was needed. The Senate acted on September 27 and the bill now goes to the House. And we expect that it will next year enact additional energy legislation. The Congress is also about to give final approval to the Witteveen facility which will augment the resources of the IMF.

5. An oil price increase now could have other unfortunate implications, globally and in the United States. It would place the Arab oil producers in the unhelpful position of raising the price of oil at a point when the results at Camp David have at last provided essential forward motion toward peace in the Middle East.²

6. For these and other reasons, our government requests that you reconsider Venezuela’s position on oil prices and that Minister Hernandez not continue his efforts to obtain a price increase at this time, and that this issue should be deferred until the regularly scheduled review. Venezuela can in this way make a significant contribution to the maintenance of forward momentum for the solution of important world economic and political problems. President Carter intends to continue to pursue with vigor policies toward the same end. End text.³

Christopher

1. Source: National Archives, RG 59, Central Foreign Policy Files, D780396–1071. Confidential; Immediate; Exdis. Drafted by Rosen; cleared by Vaky, Blumenthal, Schlesinger, and Owen; and approved by Cooper.
2. The Camp David Accords were signed by Egyptian President Sadat and Israeli Prime Minister Begin on September 17.
3. Chargé d’Affaires John J. Crowley made the démarche to Minister of Presidency Lauria on September 29. The Minister said that he would convey the U.S. position to Pérez, who had “an extremely full schedule” that day and believed that the President “would be willing to reconsider the current” Venezuelan position, although he “doubted this would result in any change.” Crowley characterized Lauria as “literally President Pérez’s right-hand man, and his views may be taken as accurately reflecting those of the President.” (Telegram 9294 from Caracas, September 29; National Archives, RG 59, Central Foreign Policy Files, D780398–1151)