206. Editorial Note

The June 1967 Six-Day War and the concomitant oil embargo disrupted the equilibrium achieved in the early part of 1967 by the oil companies and the producer governments; see Documents 228 ff. The major contractual issue still to be resolved on the eve of the war was the dispute between the Government of Iraq and the IPC over the 99.6 percent of the IPC concession removed from company control. The oil company wanted to be able to choose the 0.5 percent it would still control. In May Iraqi President Arif assumed the Prime Ministry, replacing Naji Talib, and appointed a moderate Cabinet without strong Nasserites and active Baathis. An FSE item for a May 12 report to Katzenbach noted: “Unless Arif feels that he must defend himself against potential Syrian and Egyptian propaganda attacks by exceeding both countries in socialism and xenophobia, the chances of a revival of the private sector of Iraq’s economy and a settlement of its dispute with IPC are greatly enhanced.” (Department of State, E Files: Lot 71 D 84, FSV Facilitative Service—1967)