261. Memorandum From the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Rountree) to the Secretary of State1
Washington, July 6,
1957.
SUBJECT
- Crude Oil Imports into the United States
In addition to the general policy implications brought to your attention by the E area,2 and with which I concur, the imposition of restrictions on crude oil imports into the United States is likely to have adverse affects on US relations with the oil producing countries in the Middle East:
- 1.
- Oil income is the significant element of the financial resources of the Middle East, constituting the major source of foreign exchange earnings for many countries of the area. In the absence of restrictions, imports into the east coast of North America (principally into the US) might be expected to rise from a current level of 329,000 barrels per day to about 850,000 barrels per day by 1965; this increase would represent to the area additional income of approximately $160 million annually.
- 2.
- The restrictions would apply particularly to imports from Saudi Arabia, Iran, Iraq and Kuwait. These countries are not likely to view US action as consistent with our profession of friendship and desire to assist them with their economic development. It might be construed as an effort to exert political pressure, especially by Saudi Arabia.
- 3.
- Since the contemplated restrictions are apt to discriminate against Middle East petroleum, they will, once understood by countries of the area, be considered most objectionable; and they are likely to lend encouragement to additional discriminatory economic policies on the part of the Arab League.
- Source: Department of State, Central Files, 411.006/7–657. Confidential. Drafted by Shaw and Burdett.↩
- See Document 259.↩