218. Memorandum of Conversation1
Riyadh, October 17, 1973.
[Omitted here is discussion unrelated to oil.]
- The information which Shaykh Adham then went on to volunteer indicates that firm decisions on oil policy in the present crisis have been taken by the Saudi Government, and that it is therefore probably already too late for Ambassador Akins to be able to affect Saudi decisions on this matter. Because of the importance of what he was passing [Page 599] to us, Shaykh Adham took particular care to consult the official documents in his files in order to be certain of his accuracy in defining for us the Saudi Government position to be adopted at the upcoming Arab oil meeting in Kuwait. Shaykh Adham stated that during the past twenty-four hours Egypt and Saudi Arabia had exchanged messages which resulted in an agreement to take the following joint position in Kuwait: a five per cent cutback of oil production every month until the Middle East crisis is “satisfactorily resolved.” By satisfactory resolution they meant in effect the implementation of U.N. Security Council Resolution 2422 but specific mention of that Resolution probably will not be made in Kuwait because Saudi Arabia does not subscribe to Resolution 242. The Egyptians agreed to a point insisted upon by the Saudi Minister of Petroleum and Mineral Wealth, Shaykh Zaki Yamani, that the public statement of this decision will include no specific reference to the United States. The Egyptians insisted that the five per cent reduction be made effective immediately rather than following a “warning phase” of one or two months as desired by the Saudis. The Egyptians then suggested that the rate of cutback be doubled from five per cent to ten per cent after three months if no progress has been made. The Saudis objected to this suggestion and it was dropped by the Egyptians.
- The Egyptian-Saudi joint position contains two other points as
outlined by Shaykh Adham:
- There will be a total embargo of all oil sales to any country that officially employs its own regular armed forces in support of Israel. The Egyptians had wanted to apply this stipulation to any country whose “personnel” became involved in the fighting. The Saudis insisted that the term “personnel” not be used because of their recognition that individual Americans or other nations are serving as volunteers in Israel’s armed forces. The Saudis also warned the Egyptians that the use of the loose term “personnel” would leave the Arabs vulnerable to possible “big lie” operations by the Soviets or Israelis who might want to sabotage Arab-American relations; hence, Saudi insistence that the intervention would have to be “official and overt” to constitute grounds for total embargo.
- Any country which decided to help the Arabs would be assured of all the oil it wants. Shaykh Adham mentioned as an example the “possibility” that President Pompidou of France will lift the French embargo on military sales to the Arabs.
- It was agreed after debate that the five per cent reduction would apply to all countries with the exception noted above of countries which choose to help the Arabs. Agreement on this point resulted chiefly from Saudi insistence that Arab leverage over the United States [Page 600] is increased by applying the reduction to all countries. If Japan and Western Europe are equally affected, then they can be expected to apply their fullest persuasive powers on the United States to support peace measures.
- According to Shaykh Adham, the final Egyptian agreement to all of the foregoing was received in a telegram from Cairo early on the morning of 17 October. The Saudis believe that the Algerian and Libyan positions will be much more extreme than the Saudi-Egyptian position. They know, for example, that the Algerians want to cut production by twenty per cent per month. The Egyptian Minister of Petroleum had already arrived in Kuwait with another set of instructions before Cairo and Riyadh reached their agreement. Shaykh Zaki Yamani therefore took with him to Kuwait yesterday a new brief for the Egyptian minister. The Kuwaitis have notified the Saudis that they will support Saudi terms at the Kuwait conference provided the Egyptians are also in agreement. This therefore means that those three countries will present a solid front which the smaller Gulf producers are expected to join also. Shakyh Adham therefore believes that five per cent will carry the day, although he does not totally rule out the possibility that the final result might be a compromise closer to ten per cent.
[3 lines notdeclassified]