257. Telegram From the Department of State to the Embassy in Saudi Arabia 1

4967. 1. Aramco VP Pendleton called on Dep Asst Sec Davies July 7 to report private conversation July 2 between SAG Minister Petroleum Yamani and Aramco VP Brougham.

2. According Aramco report, Yamani re-emphasized worsened US position in Arab world and growing Arab bitterness toward US. Declared [Page 463]no Arab state could accept settlement that includes Arab recognition of Israel. Said USG will have to take position more favorable to Arabs if USG interests, including Aramco concession, to be maintained in Arab world.2 Declared SAG trying defend its relations with and attitude toward Aramco against attacks from Iraq, Syria, and Algeria. Said moderate Arab governments such as Saudi Arabia will be friends of West for long time if permitted do so.3 Yamani also dwelt on several articles he had written for Saudi press showing unfavorable impact on Saudi economy resulting from ban on oil exports.

3. Brougham apparently made effective rejoinders to Yamani statements and attempted explain rationale of pertinent US actions.

4. Comment: While Yamani continues paint gloomy picture, his own articles and similar relatively realistic SAG propaganda line (e.g., July 7 Jidda radio) demonstrate type enlightened self-interest we hope see increasingly exhibited by SAG and other governments of Arab oil-producing countries. Such welcome initiative should of course continue be given appropriate encouragement.

Rusk
  1. Source: Johnson Library, National Security File, NSC Special Committee Files, Economic [2 of 2]. Confidential. Drafted by C. Held (NEA/ARP), cleared by W. Brewer (NEA/ARP) and J. Akins (E/FSE), and approved by Davies. Repeated to Dhahran.
  2. Yamani told Brougham that the U.S. position in the Arab world had deteriorated seriously and that there would be negative consequences for the oil company as a result: “That whereas we should have thirty odd years in which to enjoy the remainder of the concession, he predicts that unless there is a change in USG policy that our tenure will be closer to four years.” (Aramco telegram from Dhahran, July 3; ibid., Country File, Middle East Crisis, Dhahran Cables, 6/67–7/67)
  3. In the meeting Yamani discussed issues that could inhibit Arab relations with the West: “He then asked my appraisal of the value of the Aramco assets including the reserves. I refused to hazard a guess and he said in any event the figure is in the billions of dollars and I replied it is certainly many billions. Yamani then said ’Is this not worth more than five million votes in the US?’” Brougham argued that Yamani must recognize that the oil companies had no voting power but “have worked very hard to acquaint the USG with the facts bearing on the Middle East situation and where the US national interest lies.” (Ibid.)