Office of the Historian

216. Memorandum From the Chairman of the Economic Intelligence Committee (Guthe) to the Members of the Committee1

Washington, April 9, 1956.

SUBJECT

  • Proposal for Study of Middle East Oil Situation
1.
Need has been expressed for a coordinated assessment of the likely impact of possible developments affecting Middle East oil. Mr. Dillon Anderson, Special Assistant to the President for NSC Matters, in a discussion with the Assistant Director for National Estimates, CIA, suggested that, as necessary intelligence background for US actions in the Middle East, we should assess the impact of these actions on Middle East oil. Other high-level requests for intelligence [Page 595] in this field have revealed that although there is available a large amount of factual information relating to Middle East oil, such information has not been put together in a form, and analyzed in a manner, which permits the ready answering of significant questions which have been and are likely to be raised in this field.
2.
What Mr. Anderson and others seem to feel a need for is a reliable statement of:
a.
the essential facts regarding Middle East oil and its importance to the West in peace and war;
b.
the practicability of a shift to Soviet or “independent” participation or control in Middle East Oil production and distribution;
c.
the economic implications of such a shift for the US and its Western allies, the Sino-Soviet Bloc, and the Middle East oil producing countries.
3.
A study on this subject should be valuable to the National Security Council Planning Board as a framework for considering possible US courses of action regarding the Middle East oil producing and oil transit countries, and for evaluating the probable dimensions of any developing threat to the Western oil position in the area.
4.
It is considered that this study should be undertaken as a special coordinated research project rather than as a National Intelligence Estimate because of its technical and only partly estimative character. An NIE on the estimative aspects of this situation (political trends in the oil countries, Soviet intentions, wartime considerations, etc.) may be needed at a later time, but it seems that this NIE should be separate from and preferably grounded on an economic and technical survey which would be undertaken in the proposed study.
5.
A statement of the problems involved, as seen by the ONE staff, is attached hereto.2
6.
It would seem to be desirable to establish an EIC ad hoc Working Group for the purpose of preparing this study. This Working Group should consist of representatives of those agencies which have important capabilities in this field. As the first order of business, the specialists on such an ad hoc Working Group should proceed to prepare a detailed terms of reference for the proposed study. This outline would be reviewed by the EIC in order to insure that all significant aspects of the problem are considered prior to the preparation of the study. In view of the immediacy of need for an agreed study on this subject, it would be highly desirable for the proposed study to be completed as soon as possible and at most within four (4) months.
7.
It is recommended that the EIC authorize the establishment of an EIC ad hoc Working Group to prepare a study on the Middle East oil situation, proceeding as indicated in paragraph 6 above. This recommendation will be considered at the EIC meeting scheduled for 12 April 1956.3
Otto E. Guthe
  1. Source: Department of State, OF Files: Lot 59 D 578, Middle East Petroleum. Secret. The members were the Economic Intelligence Committee representatives of the Intelligence Advisory Committee Agencies and also of the Office of the Secretary of Defense, the Department of Interior, and the International Cooperation Administration.↩
  2. Not printed.↩
  3. The completed study dated May 8, 1956, was sent to Hoover on May 23; see Document 219.↩