586. Telegram From the Department of State to the Consulate General at Dhahran1
182. For Ambassador Wadsworth. Rapid development oil supply crisis particularly in Western Europe necessitates implementation without delay emergency plans which call for US oil company collaboration with European counterparts in arrangements for meeting requirements in light closure Suez Canal and IPC pipeline. As you know one factor in our reluctance thus far to act this regard has been desire avoid implication to Arab producing countries that US seeking bail British and French out dilemma created by their action in Egypt. Important that decision to proceed be placed in its proper context so that Saudi reaction will not impair success of our effort. [Page 1148] Suggest you discuss matter with King Saud urgently along following lines:
Closure Suez Canal and rupture IPC pipelines has created oil supply problem throughout Western Europe and Arab-Asian areas which will require special measures primarily among international oil companies. In implementing these special measures US has much in mind extreme desirability minimizing effect of present situation on Saudi Arabia’s supply position and thus Saudi Arabia’s income. This objective can be accomplished best by coordinated efforts among international companies upon whom falls responsibility for shipping and marketing facilities. We therefore plan encourage US companies participate in such coordinated approach, working insofar as Europe concerned with Organization for European Economic Cooperation (OEEC) in which seventeen Western European users are represented. This arrangement will have effect of “pooling” oil deliveries to Western Europe with OEEC assuming responsibility for allocations among participating countries of Europe’s share.
Similarly, shipments from all sources to Asian and African countries now faced with oil shortages and which are not in OEEC will be augmented by a coordinated effort among supplying companies.
Plan does not require any affirmative action on part Saudi Arabian Government. It reflects most practical means of meeting present situation and does not connote change in policy or permanent arrangement. In consonance our continuing desire exchange information of mutual interest, we wish King Saud to be fully informed in advance re these efforts which we confident he will support. We repeat it our earnest hope that present problem can be overcome with least possible adverse effect upon interests of SAG which will continue be uppermost in our minds.
You might take opportunity impress upon Saud that SAG interests deeply involved in continued operation of Tapline.
Report reaction urgently.
- Source: Department of State, Central Files, 840.04/11–1856. Secret; Niact. Drafted by Rountree, approved by Hoover, and signed by Rountree for Hoover. Repeated Niact to Jidda.↩