The Ambassador in the United Kingdom (Gifford) to the Department of State 1
5169. Re Amman’s 164, March 26.2
1. We believe present ME oil problem calls for type of initiative suggested reftel. Concur that some declaration of western position seems desirable to impress on ME producing countries mutuality of ME and western interests and to convince them western govts anxious to insure that ME countries receive greatest possible benefit from development their oil resources.
2. To extent UK now greatly alarmed over threat to ME oil resources and anxious work closely with US, time propitious for advancing US ideas re handling ME oil problems and attempting achieve satis agreement on common policy. While we believe it necessary to aim at achieving and implementing common policy soonest, it shld be recognized there may be considerable difficulties and delay since:
- UK inclined move more slowly than US in dealing with ME oil problem and will probably hesitate submit their investments to common policy except on their terms;
- There appears be divided counsel among Brit about best course action (some UK officials convinced need for far-reaching concessions to Iranian demands, while others together with AIOC apparently hope to salvage maximum from present polit situation by continuing use tactics of applying pressure at proper places);
- Detailed consultations with companies will be necessary. Therefore, proposed program probably cannot be achieved quickly enough deal with immed pressing problems Iran and Iraq, which may meanwhile require separate measures.
3. Believe it desirable avoid at present time complex and controversial problem allocation of production among various countries and neutral commission to arbitrate points of issue.
4. Before making policy declaration it appears necessary carefully consider possible psychological reaction from ME countries. In particular question advisability joint US–UK statement which might create impression that US and UK ganging up on ME countries and tend to increase resistance to west. Joint statement might also provide propaganda target claiming US–UK cartel exploitation of ME. Further complicating factor is Dutch and Fr interests in oil resources which altho minor compared US–UK participation are important to those countries and will require acknowledgement. Finally wld emphasize that if it proves advisable to issue any policy declaration [Page 296]it shld be simple, understandable and capable of prompt implementation in order to be effective.3