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165. Telegram From the Department of State to Secretary of State Kissinger1

Tosec 40001/37659. From Robinson. Subject: Your Breakfast Meeting with Ansary, February 15, 1976.

1. At your breakfast meeting with Ansary and Robinson at the Ritz Carlton on Sunday, February 15, the following matters were discussed.

2. You exchanged views with Ansary on our general policy of Soviet containment. Ansary reported that the Shah recognizes the difficulty of maintaining a balance between the interests of détente while at the same time blocking Soviet aggression in other parts of the world but feels that your present policies are sound.

3. You discussed the importance of continued efforts to strengthen US–Iran relations and reconfirmed the importance of Iran’s continued development of military strength to preserve stability in the Gulf. It was agreed that no other nation was capable of performing this task.

4. You supported Ansary’s view that Iranian oil exports should be maintained at a high level to provide funds necessary for purchase of US military equipment. We considered three aspects of this problem:

Ansary indicated that Iran would push the consortium members to purchase oil at the projected level of 4.9 million barrels per day. He expressed concern that these purchases had fallen to as low as 3.3 million barrels a day recently but admitted that to some extent this was the result of a non-competitive price for heavy crude oil. He acknowledged that there would be a decrease of 9.5 cents per barrel which was aimed at overcoming this disadvantage.

—We discussed our bilateral oil project and you made the point that the problem was largely one of needing a greater discount margin to encourage the support of FEA and DOD. We indicated that the general plan which evolved out of our discussion in London2 was acceptable in principle to the administration but that we had learned subsequently of the need for Congressional appropriation which would subject the deal to more careful scrutiny. This also made it more important that we have full support of DOD and FEA in the Congressional hearings which would be necessary to obtain the appropriation. You mentioned the possibility of a discount of as much as a dollar a barrel to [Page 496]which Ansary responded that we have not yet commenced our negotiation of this key element of the transaction. It was agreed that we would not push this program for the moment, recognizing the need to get Rumsfeld, Ellsworth and Zarb on board before proceeding with an aggressive effort to conclude this arrangement.

—In the meantime, it was agreed that Iran should pursue swap arrangements with individual US companies supplying military equipment. Robinson reported that he had met with representatives of these companies to assure State support but stressed that decisions on the part of the individual companies would have to be on a strictly commercial basis.3 It was agreed that the USG should not become directly involved as these negotiations were likely to become public knowledge and we could be subject to criticism if we were to play a more direct role.

5. We discussed ways in which we could gain greater support for Iran on the part of DOD and FEA. It was agreed that Ansary would plan to return to Washington after the Florida primary and perhaps by mid-March. At that time you would attempt to arrange:

—A meeting with the President for discussion of overall US–Iran relations and the importance of continued US support for Iran’s expanding military capability.

—This would be followed by a small dinner affair with Rumsfeld, Ellsworth and Zarb in an effort to give DOD and FEA a sense of participation in our relationships with Iran.

6. There followed a meeting between you and Ansary alone which he had requested for a discussion of personal matters.

  1. Source: Library of Congress, Manuscript Division, Kissinger Papers, Box CL–153, Iran, Chronological Files, 1 January–14 April 1976. Secret; Immediate; Nodis; Cherokee. Kissinger traveled to Caracas on February 16 to meet with President Pérez.
  2. See Document 153.
  3. See footnote 3, Document 164.