Foreign Relations of the United States, 1969–1976, Volume XXXVI, Energy Crisis, 1969–1974

176. Memorandum of Conversation¹

Washington, April 17, 1973, 5 p.m.

• PARTICIPANTS
  • Zaki Yamani, Minister of Petroleum, Saudi Arabia
  • Prince Saud Faisal, Deputy Minister of Petroleum
  • Henry A. Kissinger, Assistant to the President
  • Harold H. Saunders, NSC Staff

Dr. Kissinger expressed his pleasure in seeing Minister Yamani. Recalling a conversation last summer,² he asked Prince Faisal how his back was doing. [Dr. Kissinger had then referred the Prince to the osteopath who works with the President.] Turning back to Minister Yamani, Dr. Kissinger said with a smile that he had heard last year from the oil companies that Yamani had been a very difficult negotiator.

Minister Yamani said he was sure that the oil executives had changed their mind now in the light of settlements that had been reached since last summer. He said that “we” had worked out a good solution which might last in the right atmosphere until the end of the concession era. There are always problems in the oil industry, and now is no exception. Now oil is a problem for the whole world.

Dr. Kissinger noted that there are always “unemployed intellectuals” who find it fashionable to write dramatically about whatever subject is fashionable at the moment. This year the subject is oil.

Minister Yamani asked Dr. Kissinger whether he meant to imply that he felt problems would not develop.

Dr. Kissinger replied, “Oh, we’ll have problems.” It is necessary to see the problem, however, in a wider perspective. But it is a problem, and it has to be handled in a statesmanlike manner.

Minister Yamani, commenting on his talks in Washington, said that US officials seem to recognize the problem. The problem is there not only for the US but for the whole world.

Dr. Kissinger said there is no question about that. Saudi Arabia will be central to solutions to the problem because it has the largest reserves.

Minister Yamani agreed that Saudi Arabia has the largest reserves. It is a Saudi obligation to preserve them for the most productive possible use. Saudi Arabia does not want to dissipate its reserves in a short period. The Saudi interest—if Saudi Arabia looked to its own interests alone—is to produce only what it needs for its own development. However, if Saudi Arabia did not increase production to meet rising demand in Europe, the US and Japan, that would aggravate shortages for the rest of the world in the near term, and prices would double.

Dr. Kissinger asked what the solution is.

Minister Yamani said that, “being a friend,” Saudi Arabia has a sense of responsibility—”a moral obligation”—to increase production beyond Saudi Arabia’s own needs in order to meet Free World requirements. He hoped that the “political atmosphere” would enable Saudi Arabia to continue this policy. Saudi Arabia is very much embarrassed by the “present situation.” Saudi Arabia is “lonely.” It is under heavy pressure from the rest of the Arab world. How long it could withstand that pressure he did not know. He hoped the pressure could be removed so that Saudi Arabia could do as much as anyone to solve the oil problem. That problem is not only a matter of supplying crude oil, but also an issue for management of balance of payments.

Dr. Kissinger asked how Saudi Arabia could help limit the drain on the US balance of payments.

Minister Yamani said that the US would have huge import requirements. He was prepared to discuss possible means of alleviating the drain on the US balance of payments.

Dr. Kissinger said that we place great importance on friendly relations with Saudi Arabia and on its stability and progress. At a national level we feel a very close bond to Saudi Arabia. On the general proposition that Mr. Yamani had advanced, we are certainly anxious to work with Saudi Arabia to meet its problems and to bring about helpful conditions. Dr. Kissinger asked whether Minister Yamani had any specific ideas.

Minister Yamani said that the most important issue to be dealt with is a settlement of the Arab-Israeli problem.

Dr. Kissinger said that the US problem with respect to a settlement is that in principle we are willing to be helpful and we have even taken exploratory steps with which Minister Yamani is familiar. However, most Arab leaders exaggerate the degree of pressure which the US can exert on Israel. In principle, Dr. Kissinger said that he would be willing to get involved in a solution to the problem. But others have to realize that it had taken two and a half years to set up the China trip and four years to reach a Vietnam settlement. Patience is not a Middle Eastern trait. He said that every time he talked to anyone, he gets distorted reports back about what he had said.

Dr. Kissinger said that, in his view, what had aborted previous efforts at a settlement was that everyone ended up discussing abstract plans in public with everybody wanting to pick them apart. It is difficult to find a structure in which to operate. To put it quite tactlessly, there has to be more discipline and patience on the Arab side.

Dr. Kissinger continued, noting that Minister Yamani as a negotiator well knew that if one had to play all his cards at once and to explain publicly each play, he would never get anywhere in a negotiation. He said it was like trying to play a half a dozen different chess matches at the same time while having to explain each move to the audience and to his opponent as it was made.

In principle, Dr. Kissinger concluded, the US has no interest in perpetuating unsettled conditions in the Middle East. Only the Soviet Union could profit from that situation.

Prince Saud acknowledged that a settlement would take time. But for friends of the US, the present appearance of US policy is not comforting. The continued flow of aid and arms to Israel gives the impression of an unbreakable bond between the US and Israel.³

Dr. Kissinger said he understood that. He said that he was not one who believed that arms deliveries would help produce flexibility; he did not believe that they would produce rigidity either. What is lacking, Dr. Kissinger felt, is a coherent strategy on all sides. If you don’t know where you are going, any road will get you there. If the US applies pressure on Israel before there is anything to negotiate, the Administration gets into a domestic uproar without any opportunity to make progress on the Arab-Israeli front. We held up sending aircraft to Israel for more than half a year, and it did not get us anywhere because there was no negotiating framework. In the American system, there is always some election in the near future and the US cannot sustain pressure without some framework or objective.

Prince Saud said that other Arabs—even Europeans talking to Saudi Arabians—asked why Saudi Arabia should only talk with the US and only invest its oil revenues in the US.

Dr. Kissinger said he understood the Saudi problem. He felt that there had been too much rhetoric about the Middle East problem. He said if one had watched what the White House has achieved in negotiations, it would be clear that the negotiators had moved quietly until a situation had crystallized, and then they had moved very rapidly. The White House is not staffed to conduct a negotiation in the conventional diplomatic way. We cannot be involved in an extensive exchange of diplomatic notes and formal negotiations. What the White House has is authority. What we need is a concrete situation in which to use it.

Minister Yamani acknowledged his understanding of what Dr. Kissinger had said.

Dr. Kissinger said that he was not assessing blame. He said he recognized and the President recognized the problem that faces our Arab friends.

Minister Yamani recalled that Dr. Kissinger had said that the US has no interest in the continued absence of a settlement. Minister Yamani said he would put the proposition the other way around—that the US has a vital interest in bringing the parties together.

Dr. Kissinger said that is true. But once this has been said, then the questions rise: What sort of settlement should it be; how can it be achieved; how can the parties bring it about? It would never be possible to get a settlement without a strategy for achieving it.

Minister Yamani recalled that Jordan and Egypt had moved a good distance and made “so many” concessions and yet Israel had not moved a bit. In contrast, Israel’s position had hardened. Most of the obstacles on the Arab side had been removed—the Soviets have left Egypt and Egypt has signified its willingness to sign a treaty with Israel. There is great frustration on the Arab side. The situation puts friends of the US in a very embarrassing position. Those friends want to cooperate with the US as much as necessary, and they want to help others take the same avenue. They want obstacles to cooperation to be removed.

Dr. Kissinger said that the US is certainly willing, as we have told

Egypt, to make a serious effort to achieve peace. We can always make a general diplomatic effort. If one is talking about a White House effort, however, it is necessary to work out a strategy and to build confidence in working with each other.

Minister Yamani said he thought there had been efforts in the past to develop confidence and the Arabs had placed their confidence in the US.

Dr. Kissinger said that “we” [in the White House] were not involved. He said that he was simply stating the facts. As a government we are willing to be helpful and we want to see progress.

Prince Saud said an effort should be made in the Middle East to show the US as a party interested in a settlement.

Dr. Kissinger noted that the US always gets caught between the two sides.

Prince Saud said that if everyone is mad at the US, then it is okay. Dr. Kissinger asked Minister Yamani if he agreed, and he said, “Yes.”

Minister Yamani asked who is going to take the first step if not the US. The Saudis feel Israel has no interest in a settlement. The US must have an interest for many reasons—not just energy. The US is the only power who can take the first step.

Dr. Kissinger asked whom Minister Yamani had seen here. Minister Yamani noted that he had seen Secretaries Shultz and

Rogers.⁴ He had discussed energy matters with them and Saudi Arabia’s ambition to industrialize. He had also stated his political concerns but not at this same length or with this degree of frankness. He had felt that Dr. Kissinger was the one to whom he should talk frankly about this subject.

Dr. Kissinger thanked the Minister and said he understood. He noted that this is a new problem for “us here.” In negotiations with China, Vietnam and the USSR, we controlled some of the assets in the negotiation. In the Middle East, we do not control all the assets. The pace of events is something that we cannot control. Nor do we control any of the principal actors. In negotiations with China, Vietnam and the USSR, the White House had tight control over the negotiations and could determine when to apply pressure and when to make concessions.

Dr. Kissinger said, “You have to understand the problem.” He said he believed it is fruitless to make a public proposal. UNSC resolution 242⁵ was deliberately designed to permit two different interpretations of the basis for negotiation. Therefore, if one is to go from Resolution 242 to a settlement, one must give it very concrete meaning. This is what has to be done now, and it is difficult to do this in public.

Minister Yamani said that even a long journey begins with one step.

Dr. Kissinger replied that we have to know where we are going. We recognize the problem.

Prince Saud said that even before concrete involvement in producing a solution, the US could portray a general image of greater balance. For instance, if the US vetoed the resolution then in the Security Council [condemning Israel’s raid on Beirut]⁶ this would create a very bad image of the US in the Middle East.

Dr. Kissinger said he heard what the Prince was saying. He knew that the Saudis are friends of the US.

Dr. Kissinger indicated that he had found it very difficult to keep secrets about conversations. He was not eager to have his visitors talk to too many people about this conversation although he assumed that there would be a full report to King Faisal.

Minister Yamani replied that he did not talk very much with other Arab leaders. “We are too embarrassed.” He said that is why they had come to see Dr. Kissinger.

Dr. Kissinger said he felt it was premature now for them to talk to very many other Arab leaders. At some point, however, it would be useful for them to do so.

Minister Yamani said he hoped that his point had been made clearly.

Dr. Kissinger replied, “You have made an impression.”

Minister Yamani thanked Dr. Kissinger very much for the opportunity to talk. He said it had been a real pleasure.

Dr. Kissinger asked Minister Yamani to let him know when he next came to the United States. He hoped it would be possible to report some progress by then.

Minister Yamani noted that he would be coming in September. Dr. Kissinger said that maybe some progress could be reported by then. The US will make a major effort.

[Note: Yamani and Saud throughout spoke unemotionally in soft-spoken tones. The tone was one of Saudis presenting their dilemma in close association with the US.]

Harold H. Saunders

⁷

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 1027, Presidential/HAK Memcons, Memcons, April–November 1973. Secret. Sent for information. Drafted by Saunders. The meeting took place in Kissinger’s office. All brackets are in the original. In an April 17 briefing memorandum, Saunders and Quandt reminded Kissinger of Yamani’s proposal for a special relationship with the United States (see Document 140), the “real purpose” of which was to develop closer strategic ties by binding the United States to Saudi oil, offsetting a short-term U.S. balance-of-payments problem by investing in the United States, and thus guaranteeing that the Saudis would not cut off the flow of oil. They thought this purpose had now become a Saudi desire to invest in their own development and industrialization. Beside this paragraph Kissinger wrote: “Important.” (National Archives, Nixon Presidential Materials, NSC Files, Box 630, Country Files, Middle East, Saudi Arabia, Vol. III)
2. See Document 134.
3. According to an April 17 backchannel information report, Prince Saud was “officially empowered” to convey King Faisal’s “acute anxiety” over the danger to American oil interests in the Middle East posed by growing extremist Arab pressure, much of it coming from Sadat, to use the area’s energy resources as a political weapon in the “inevitable” war with Israel. Faisal now believed that war might force him, against his better judgment, to join an Arab oil boycott. Faisal was also “tired” of writing letters to Nixon. The message also reported Faisal’s policy of unlimited oil production, his continuing desire to support the United States, and his stated belief in the mutual nature of the U.S.-Saudi relationship. The message concluded that the implied threat from Faisal, and from Sadat through Faisal, was designed to press the United States into resolving the Middle East “impasse.” (Ibid., Box 1298, Saunders Files, Saudi Arabia, 1/1/73–5/31/73)
4. No record of the meeting with Shultz has been found. A memorandum of conversation of Yamani’s meeting with Rogers, April 16, is ibid., RG 59, Central Files 1970–73, POL 7 SAUD. He also met with Casey that same day. (Memorandum of conversation, April 16; ibid., PET 12 SAUD) In an April 27 letter to Shultz, Rogers wrote that as a result of Yamani’s visit and his obvious desire to invest Saudi oil revenue in domestic industrial development, the United States should “show enough interest in these aspirations” to send a small group to make a preliminary assessment of the possibilities. He thought Simon and Casey should lead the team. (Ibid., FN 9 SAUD)
5. UN Security Council Resolution 242 was adopted November 22, 1967, following the Arab-Israeli war in June. It called for the “withdrawal of Israeli armed forces from territories occupied in the recent conflict,” and for the “termination of all claims or states of belligerency and respect for and acknowledgement of the sovereignty, territorial integrity, and political independence of every state in the area and their right to live in peace within secure and recognized boundaries free from threats or acts of force.” (Year-book of the United Nations, 1967, pp. 257–258) The resolution is printed in full in Foreign Relations, 1964–1968, volume XIX, Arab-Israeli Crisis and War, 1967, Document 542.
6. A reference to the Israeli commando raid on Beirut on April 9–10, named Operation Spring of Youth. Among those killed were three leaders closely tied to Yassir Arafat regarded by Israel as having played a role in the Munich massacre of September 5, 1972. The massacre occurred during the 1972 Olympic games when members of Black September invaded the Olympic quarters of the Israeli team, killing two and taking nine hostage. Their negotiations with West German authorities for the release of 200 Arab commandos held by Israel ended September 6 when a West German rescue attempt resulted in the death of the nine Israeli hostages, five Arab guerrillas, and one German policeman. Three of the guerrillas were captured. Eight weeks later two Palestinians hijacked a Lufthansa plane in Beirut and demanded their release; the West German Government complied.
7. Printed from a copy with this typed signature.