186. Telegram From the Embassy in Saudi Arabia to the Department of State1

2047. Subject: Energy: US Views on Oil-Consuming Countries’ Cooperation Presented to Yamani. Ref: A. State 74563; B. State 85246; C. State 88651.2

Summary: Amb informed Yamani we were concerned with some public statements creating impression USG seeking establish a kind of consumers’ cartel for “confronting” producing governments. This was not at all our idea. Rather, we were aiming encourage cooperation among consumers as well as cooperation between consumers’ groups and OPEC. There could be difficult problems of supply in years ahead and countries should not find themselves suddenly short of petroleum. We were still feeling our way in this sphere but there would be further talks next month with other consumers. Cooperation of this type not entirely new as we had worked with other governments before to pool [Page 486]knowledge in R&D matters. Yamani feared some of the more aggressive OPEC members might welcome a confrontation with consumers’ organization. He feared also there were powerful elements in US who sought formation consumers’ group as means to combat OPEC. Yamani said he had been misquoted in Washington Post article and he wondered if type of thinking in Post editorial few days later3 represented views of those who sought organize consumer group for hostile political reasons. Ambassador pointed out any injection of politics into efforts for consumers’ cooperation would be their death knell and promised send Yamani excerpts from recent USG public statements which made clear our goals. Yamani seemed partially convinced but further efforts may be necessary allay his suspicions. End summary.

1.
In call May 16 on Petroleum Minister Yamani, I told him Dept had asked me elucidate US views and intentions regarding possible cooperation between govts of petroleum-consuming countries. We were stimulated to make some comments on this subject by reports of public statements, some coming from officials of Japanese Govt who, intentionally or unintentionally, had seemed create impression USG seeking draw together a kind of consumers’ cartel with objective of “confronting” producing govts. I said I wanted, if I could, to allay any such misapprehensions and provide clearer understanding of what we trying to do. Certainly it was not at all our idea to work toward any kind of confrontation or contest between consuming and producing groups.
2.
On contrary I told Yamani, we were aiming encourage cooperation among consumers as well as cooperation between consumers group and OPEC. With prospect that petroleum supply and demand curves would move closer to each other in years just ahead, and with less shut-in capacity around world, it seemed desirable there should be some kind of arrangement so that any particular consuming country would not find itself suddenly without adequate supplies. However, we are still feeling our way in this sphere and I remarked that we could not say precisely at this stage what forms consumer cooperation might take. We were looking forward to further talks next month with European and other consumers in which Under Secretary Casey, with [Page 487]whom Yamani had met in Washington,4 would probably lead US side. In a sense this kind of cooperation was not entirely new, since we had worked for several years with other govts to pool knowledge and resources for research and development in energy matters. I emphasized again we were not seeking form any kind of aggressive cartel but that there were quite legitimate reasons for cooperation among consumer governments and that such an approach could well improve prospects for useful consultation and cooperation with producing nations.
3.
Yamani responded by remarking that several of the more aggressive OPEC members would be inclined to see formation of a consumers organization as in fact an invitation to a confrontation. Such producers might even welcome this development. They would try to inject political considerations. Saudi Arabia thought such a course should be avoided.
4.
In fact, Yamani thought, there were some powerful groups in US who from consumers’ side might see things in much same light. He had read statements by such oil experts as Adelman and Walter Levy,5 who seemed to conceive of a consumers group as an instrument for combatting OPEC and defeating its objectives.
5.
Yamani referred to Washington Post news story of April 19 reporting his views on oil and Middle East situation. It was not at all his idea that politics should be introduced into oil affairs. He felt he had been misquoted by Post and he had been much concerned by quite hostile interpretation put on his comments in Post editorial few days later. Was this the kind of political thinking and motivation that lay behind moves to organize consumer states? People with this type of outlook were known to carry considerable wieght in US.
6.
I told Yamani I thought it quite incredible anyone should think that US administration would try to introduce a political element into considerations supporting the idea of consumer cooperation. It seemed to me that if any consumer govt were to suspect they were being asked to take part in some kind of political endeavor, they would almost certainly retreat very rapidly. A suspicion of political motivation could kill cooperative efforts before they could get started.
7.
Yamani commented that it is perhaps a fine line between, on the one hand, cooperation and reasonable motives of common interest, and, on the other, collaboration to oppose and contest the rights and positions of producing govts. Perhaps USG could arrange some public statements which could reaffirm position I had just stated, since [Page 488]representatives of “some other govts” had seemed to have same misgivings that he himself had harbored. I promised to send Yamani key excerpts from recent testimony of Under Secretary Casey and President’s Energy Message,6 which I hoped would help him understand what we are really seeking to do. Yamani said he would welcome these. I left him also short written summary of principal points of our position as stated reftel B.
8.
Comment: Yamani appeared partially but not wholly convinced as to reasonableness of our motives. Prospects for consumer–producer cooperation will no doubt be improved if we can further allay the kind of suspicions Yamani has voiced publicly in the last few months and which he described more fully at this meeting. As consumer cooperation develops, it may prove desirable to keep him informed on what we are aiming to do.
9.
Yamani’s comment on Washington Post’s interview with him and its subsequent editorial reflected genuine concern at the impression that may have been created as to the aggressiveness of Saudi intentions with regard to possible management of its oil policy for political purposes. His more allusive comments on this sensitive topic in his recent conversation with the Secretary7 (reftel A) are more characteristic of the line which we believe both Yamani and others in the government prefer to take: i.e. the continuing unresolved character of the Middle East problem may cause Saudi Arabia increasing difficulties in its efforts to cooperate with the US in petroleum and other matters.
Thacher
  1. Source: National Archives, RG 59, Central Foreign Policy Files. Confidential. Repeated to The Hague, Kuwait, Tripoli, London, Tehran, USOECD, and Tokyo.
  2. In telegram 74563 to Amman and other posts, April 20, the Department relayed information to Sisco on Yamani’s visit to the United States April 16–18. (Ibid., Central Files 1970–73, ORG 7 D) Telegram 85246 to Tehran, May 4, reaffirmed that U.S. policy was not to promote a consumers’ cartel, and this should be made clear in order to counter Japanese comments to the contrary, whether intentional or not. (Ibid., FSE 1 US) In telegram 88651, May 9, the Embassies in Jidda and Kuwait were instructed to repeat the message contained in telegram 85246. (Ibid.)
  3. For Yamani’s interview, see footnote 2, Document 178. The editorial, which appeared in The Washington Post April 20, p. A22, stated that Yamani’s threats were an attempt “to placate at least for a while, those Palestinians and other Arabs” who would like to use Arab oil to “bring down Israel.” The editorial stated that the Saudis had three props to their regime: giving money to the Palestinians and Egyptians, maintaining a large military force, and issuing threats against Israel and “more carefully” against the United States. The editorial added that the United States could not “yield to hysteria” in responding to such threats not least because in return for “a measure of protection” the United States gave the Saudis access to the largest oil market in the world.
  4. See footnote 4, Document 176.
  5. See footnote 3, Document 169.
  6. Casey testified before the Senate Committee on Interior and Insular Affairs, May 1. His prepared statement on the international ramifications of the energy situation is in the Department of State Bulletin, May 28, 1973, pp. 702–706. For the President’s Energy Message, see Document 177.
  7. See footnote 4, Document 176.