213. Memorandum From Charles A. Cooper of the National Security Council Staff to Secretary of State Kissinger1

  • SUBJECT
    • Oil Sharing

We would consider trying to negotiate on an urgent basis a joint public statement with major European countries, Japan and Canada that there was mutual agreement among us that no country or countries should suffer a disproportionate hardship as a result of any disruption of normal supplies of Middle Eastern oil associated with the renewal of fighting in the Middle East. The statement could also announce that a special meeting of the OECD high level energy committee was being called for later in the week to work out cooperative arrangements to implement this principle.

Such a statement could be extremely helpful: in deterring Arab cutbacks by indicating that they were facing a united front among consuming countries;

  • —evidencing publicly that there is real substance in the Western alliance;
  • —providing a political framework for the very difficult position of negotiating a cooperative approach to the threatening crisis.

The simple arithmetic is interesting. For example, a nondiscriminatory 20% cutback in deliveries of Mideast oil if fully passed on in consumption cutbacks would reduce European consumption by 14%, Japanese consumption by 8%, and U.S. consumption by only 1.8%. The same aggregate cut-back if distributed so as to hold consumption cutbacks to the same percentage would reduce U.S., European and Japanese consumption by 6%.

It is unrealistic to expect that a significant cutback in Arab oil deliveries could be managed so as to reduce U.S. consumption only nominally, while forcing Europe and Japan to cut their consumption very significantly. Although the technical problems involved would be extremely complicated because of product mix, U.S. surge capacity, definition and measurement of consumption, differing stock positions, re-flows, imports from other areas and differing defense requirements, nevertheless the principle of equal hardship would provide a more [Page 582]solid basis for working out cooperative measures than any other measure. It is ultimately easy to understand and ultimately equitable.

Both we and the Europeans and Japan should be willing to accept such a principle, both because some basis for cooperation is needed in order to preserve our mutual relations, and because we would all do worse if we try to go it alone. We would fare worse under a discriminatory Arab cutback (unless it were extremely deep) and Europe and Japan would fare worse under a non-discriminatory cutback. If we are willing to accept less than the best possible outcome, but risk less than the worst, the principle of equal hardship ought to be acceptable. Any public statement should set forth this principle in broad enough terms to provide adequate flexibility if and when it actually has to be implemented.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–92, Washington Special Action Group Meetings, WSAG Meeting Middle East, 10/16/73. Confidential.