210. Memorandum From William B. Quandt of the National Security Council Staff to the President’s Deputy Assistant for National Security Affairs (Scowcroft)1

    • Middle East Oil

Jim Critchfield called this afternoon with the following information on the oil situation:

  • —Negotiations that had been going on in Vienna over price increases have resulted in demands for a doubling of prices, which the companies have not accepted.2
  • —The Arab oil ministers in Vienna are on the verge of leaving for an OAPEC meeting in Kuwait to develop a “war oil policy.”
  • Yamani this morning told a source that he would try to avoid a confrontation, but that King Faisal was very angry at the US position of ceasefire status quo ante. He said that the separation of economics and politics is no longer possible.3
  • —According to Yamani, Faisal has a plan ready to cut oil production back to 7.2 million b.p.d. and then to reduce it by 5% each month until Israel withdraws from the occupied territories.
  • —Egypt, in contrast to the other Arab oil producers, has given a very strong signal of its interest in signing a new agreement with Mobil for offshore exploration. Unusual steps are being taken to conclude the agreement immediately.
  • —Libya has taken no action.

Critchfield judges that if Israel begins to score major victories over the Arabs and if the US is actively resupplying Israel, our oil interests in the Arab world “have had it.”

Tomorrow is likely to be the decisive day in the Arab decision to use oil as a weapon against us.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 664, Country Files, Middle East, Middle East–General, Vol. II, Oct 69–Jan 70. Secret; Sensitive. Sent for urgent information. A handwritten notation by Scowcroft at the top of the page reads: “Thanks.”
  2. Critchfield sent similar information in an October 10 memorandum to Saunders. (Ibid., Box 1174, Saunders Files, Middle East Negotiations Files, 1973 Middle East War, 10 Oct 1973)
  3. At a meeting on October 10, Dorsey of Gulf and Jamieson of Exxon “strongly urged” Rush and Casey to “avoid actions or statements on Mideast situation that might trigger Kuwaiti or Saudi actions against U.S. oil interests.” Both men reiterated that Faisal was “absolutely infuriated” with the United States. (Telegram 202689 to Algiers and other Middle East posts, October 12; ibid., Box 661, Country Files, Middle East, Computer Cables, Mideast War, Oct 1973)