239. Circular Telegram From the Department of State to Certain Diplomatic Missions1
458. Joint State–USIA message. From press and radio accounts there seems to be need for more accurate information in Europe regarding the causes leading to the shortage of petroleum products. In a number of accounts which have come to our attention the problem was reduced to a simple formula of American unwillingness to provide oil. Obviously it is oversimplified, misleading and harmful to pose the problem in these terms. While it is expected that European criticism will diminish at least for awhile now that the Middle East Emergency Committee is being reactivated it may revive as the shortages continue. It is desired therefore that Public Affairs Officers in the respective missions endeavor through background briefings and off the record conversations with key correspondents and broadcasters to convey to the public a better comprehension of the nature of the problem.
It is not the purpose of this circular to attach blame for what has happened but to place the matter in proper perspective. Europe’s oil supply comes largely from the Middle East. Incident to recent military operations the Egyptians sank numerous vessels and destroyed installations in the Suez Canal preventing free passage. In addition certain pipelines feeding into the Mediterranean were sabotaged. As a result of these developments there has been created a serious transportation problem in respect to the delivery of petroleum because there is not a sufficient number of tankers to deliver oil over the longer route which must be followed in view of the closure of the Suez Canal and the loss of certain pipelines in the Middle East.
The problem basically is a transportation problem and not a problem of adequate oil supplies. If we had sufficient transportation facilities the accessible producing areas in the Persian Gulf and the Western Hemisphere are adequate to cover the present demand for petroleum. In this connection the one pipeline from Saudia Arabia to the eastern Mediterranean which continues in operation is of particular importance in supplying the Mediterranean area. If this were destroyed as many as 200 additional tankers would be required to move the same quantity of oil around the Cape of Good Hope to the [Page 646] Mediterranean as are now required. If this line had been lost as a result of a reaction to a premature activation of the Middle East Emergency Committee it would not have been possible in a subsequent coordinated effort to improve the supply available beyond what the uncoordinated efforts have been producing.
The following numerical data may be of some interest in discussing the problem. Currently the Eastern Hemisphere west of Suez has been using three million barrels per day of crude oil. 2.2 million b/d came from the Middle East, 475,000 from the Western Hemisphere, 200,000 from local sources and 60,000 b/d from the Soviet bloc. Middle East deliveries to this area will now be limited to the 320,000 b/d from the trans-Arabian pipeline and about 800,000 b/d around the Cape of Good Hope. Western Hemisphere deliveries are expected to increase by about 500,000 b/d over normal deliveries. The indicated shortage is therefore approximately 20 percent. As soon as it is possible to restore some of the Middle East pipeline capacity or to make use of the Suez Canal this shortage would be substantially reduced and possibly eliminated.
It should be remembered that it is most inaccurate and misleading to assume that the US favors Nasser, ignores the needs of its friends and allies and fails to understand the issues which are involved. Depcirctel 4112 stated our awareness of the economic political social and military impact of an oil shortage in Europe. Throughout the negotiations regarding the Suez Canal which began last July the US has pointed to the very problems which have now developed. In addition to the physical problems of oil supply which are involved there is an acute financial problem to be faced if the shortages persist for long. If a considerable portion of Europe’s oil supply is shifted from a sterling to a dollar basis there will be a serious impact on the financial situation of certain European countries. While we are hopeful that their own resources will permit their meeting the financial problem for awhile we would anticipate the possibility of discussions between governments regarding the financial aspects should this later be necessary. It is urged that the Chief of Mission give this matter his personal attention and the staff members especially the public affairs officers devote their best efforts to creating a better understanding of the problems involved on the part of the authorities and the public in their respective countries.
This supplements Depcirctel 451.3
- Source: Department of State, Central Files, 840.04/11–3056. Official Use Only. Drafted by Moline and approved by Robert Murphy. Sent to Ankara, Athens, Bern, Bonn, Brussels, Copenhagen, Dublin, London, Luxembourg, Madrid, Paris, Reykjavik, Rome, Vienna, Oslo, Stockholm, The Hague, Lisbon, and USUN.↩
- Dated November 17, not printed. (Ibid., 840.04/11–1756)↩
- Circular telegram 451, November 29, announced the activation of the MEEC plan of action on November 30. (Ibid., 840.04/11–2956)↩