41. Memorandum of Conversation1
SUBJECT
- Secretary’s Meeting with Yamani
PARTICIPANTS
- Ahmed Zaki Yamani, Minister of Petroleum, Saudi Arabia (Y)
- The Secretary (K)
- Ambassador James Akins (A)
- Under Secretary Charles Robinson
- Deputy Assistant Secretary Harold Saunders
K. We haven’t had a chance to talk for a long time. There are so many things to talk about that I’m delighted to have this chance. What would you like to begin with? I suppose we should talk about oil.
Y: Oil should be the subject, yes.
K: Let me be very frank. I’m told you think I’m against a producer-consumer dialogue and want a confrontation between consumers and producers.
Y: I feel you’re not in favor of the French proposal, which we Saudis originated.
[Page 140]K: I’ll tell you exactly what my position is. There must be a cooperative relationship between producers and consumers. You want security for your investments. We want security of supply. You want a reasonable price for your oil. We want the lowest price that is compatible with your interests. We have an interest in a number of issues associated with development.
We have some special problems. We have to reduce our dependence on imported oil. Either that or we have to have an absolute assurance on the continuity of supply. It isn’t tolerable for a major power to be as vulnerable as we now are.
These are the issues. The point is that the method for solving these problems has to be a cooperative one. We are ready on many of these issues to discuss our and your ideas.
My reservation on the French idea of a conference is that it is easy to start a conference but it is hard to make one produce results. Your original idea was a very small conference—just 3 on each side. We are not eager to let other countries maneuver with our chips. We want a technical conference, not a political conference. We, in our government are now trying to come up with substantive proposals for a conference. We support a conference. The only question is what will come out of a conference. If we follow the Algerian approach, it will be another UN Special Assembly. It will just produce a set of abstract principles that will not have any effect on the situation. Robinson can tell you in detail when you meet tomorrow exactly what we are trying to accomplish.
Y: We have nothing against your reducing your dependence on imported oil. Saudi Arabia is playing a difficult role in OPEC. Others want to raise the price to $15–17 per barrel. We see no alternative but for us to have a producer-consumer meeting. We don’t think you will reduce prices by reducing consumption. We will stand with you if it is in the form of cooperation. We think there should be a meeting. We think the UNGA was equivalent to having no meeting because it did not get to a serious discussion of the real issues.
The idea of a small conference with limited issues was fought by the Algerians. The U.S. did not help us.
K: We did not help you because we did not trust the other consumers.
Y: The Algerians wanted to discuss other issues in a large group. We think of the EEC, the U.S., Japan, Iran, Saudi Arabia, Algeria, Venezuela, India, Zaire, Brazil. The French have developed the same list. I was told you strongly opposed including the developing countries and that you oppose discussing issues other than price. I understand you oppose indexing.
K: No, I don’t oppose discussing other issues. I don’t see how you can discuss price without discussing other issues. You have to discuss investment and some development issues to discuss price.
[Page 141]On indexing, I have an open mind. I’d be willing to consider an index starting from a lower price.
Y: If the USG takes the lead, we are prepared before and during a conference to harmonize our views.
K: Why don’t we begin trying to harmonize our views—right now? How do we do it?
Y: We are the only ones who have such closely related interests. I’ll talk about how we are embarrassed by the new taxes. It’s the high oil prices—now you are adding $3. You are trying to serve a number of conflicting objectives at the same time.
I understand you have no objection to the tripartite meeting.
K: Right. I am willing to have an exploratory talk with you. If you try to relate all raw materials we’ll end up with another UN Special Assembly.
Y: I won’t object to raw materials as an item on the agenda but we don’t have to talk about them all at once. The atmosphere is not healthy. We could find a reasonable way to talk about raw materials.
K: We have to separate two problems: (1) Mr. Robinson will talk to you about how a conference might be organized. (2) We will do our utmost to coordinate our positions.
My nightmare is that the actual conference will turn into a rhetorical exercise.
Y: The atmosphere can be better provided we have a meeting.
K: Well, as I understand it, we are planning on a preparatory meeting at the end of March or early April. If we could make progress in our talks together I would feel better about a conference.
Y: We’ll have a discussion that no one will know about.
K: We will keep it secret.
Y: We agree on a preparatory meeting in late March. We agree that the number of countries would be 10 or 11.
K: That meeting should be at the officials’ level.
Y: Experts.
K: Another reason this has to be kept secret is that we haven’t said this even to the Europeans.
Y: You agree that the developing countries should be present?
K: Yes.
Y: We were told you were opposed to this.
K: By whom? I won’t do anything.
Y: Your Ambassador in Algeria said you have reservations about including the developing nations and raw materials. On raw materials, [Page 142] I am not thinking about putting everything on the agenda at once, but there are some issues that need to be discussed.
K: Talk to Robinson. My concern about raw materials is that it not be too theological. If you and Robinson and Jim (Akins) can work something out, I’ll be very sympathetic.
I don’t exclude raw materials. See what you can work out. I just want to be sure we know what we are doing when we go to this conference. To the degree that the U.S. and Saudi Arabia are coordinated, I have considerable confidence in the conference. But it is in our interest to keep our coordination quiet.
Y: Even in each capital or camp there are interests that are not all the same—for instance, Algeria and Saudi Arabia have different positions. The U.S. and Japan have different positions.
K: I’m trying to prevent the conference from becoming an auction.
Y: We cannot stop this entirely. So I can tell my friends you are not blocking a conference?
K: Absolutely. But I want it to succeed. The best way to block it would be to call it now and have it discuss all the issues. That would assure that nothing would come out of it.
Y: I don’t know how well it will be prepared. I’m not a perfectionist. A well-prepared conference may not be in your interest. We have an area of mutual interest.
A: I think we both have an interest in a reduction of price, tied to indexing.
K: We have to keep our coordination quiet because there are very different views in our own government:
If I agreed to indexing . . . I could put it across in our government.
Y: We have discussed in OPEC a freeze price with an index but not at the full inflation rate. But not at $2–3. Some American official has mentioned that.
K: Oh no. That is ridiculous.
(Rising) It has been very nice to see you again.2
- Source: National Archives, RG 59, Records of Henry Kissinger, Lot 91D414, Box 10, Classified External Memoranda of Conversations, January–April 1975. Secret; Nodis. Drafted by Saunders. The meeting was held in the Guest House in Riyadh.↩
- Kissinger also met with the Chiefs of Mission of the Embassies in the Gulf states on February 15 and told them: “There is no area with more nonsense spoken than energy. We are trying to reduce the power of OPEC. We are trying to decrease our dependence on OPEC and to restore the West’s freedom to act. Without this a sense of impotence will seize Western Europe and Japan until vague fears about what the oil producers will do will create unmanageable abuse. I am not saying we want confrontation.” Kissinger later explained: “We have meant to avoid three possibilities: 1. To discourage threats to use the oil weapon in the current situation; 2. To encourage moderates so they won’t rely on the Soviet Union; 3. To decrease the readiness to go to war because they (Arab side) rely on the oil weapon.” (Memorandum of conversation; ibid.)↩