232. Memorandum From James H. Critchfield, Special Assistant to the Deputy Director of Operations, Central Intelligence Agency, to Director of Central Intelligence Colby1
Washington, November 2, 1973.
- The 1973 Winter Energy Crisis
- The inclusion of the Netherlands on the embargo list adds a new and serious dimension to the problems facing the consuming nations this winter.2 In general, the scope of the embargo and the effectiveness the Arabs can bring to enforcement is exceeding earlier appraisals. Slowly, a kind of panic will start manifesting itself in most of the consuming nations; nationalism will assert itself in the form of suddenly imposed controls on the movement of crude oil and products across national boundaries; the size of the waves in what Love’s office calls “the ripple effect” is likely to become quite impressive.
- Oil men who follow domestic affairs now tell me that severe shortages in the Midwest and Northeastern US are now inevitable. One, whose judgement I respect, anticipates an “absolute disaster” in the Midwest if the Canadians make the cuts they have indicated.3
- The prospects for Europe look even worse. If the embargo continues after the end of November and is increased by an additional 5% or more, the Europeans will have to take drastic measures. Since this is daily becoming more apparent to the Europeans, we can expect reactions soon. If the EC nations initiate an internal EC sharing arrangement, the Arab producers will almost certainly react against those who attempt to cut across the lines of the Arab selective embargoes. At some point, the Europeans will probably decide that they must act together to seek their peace with the Arabs. Thus, the prospects for additional strains between the US and Europe appear to be growing.
- One of the problems facing the oil industry is the disposition of the large tankers that are rapidly becoming surplus. There are simply not enough harbors and anchorages to accommodate these vessels.
- All of these energy developments add real heat to the urgency of Secretary Kissinger’s peace mission.4 If he does not wring some concessions on scaling down the embargo soon, there will be no way to avoid a real energy crisis this winter. As far as I can judge, there are, thus far, no real contingency plans in the works that will do much to alleviate the crisis. There is a remarkable tendency to pin hopes on the miracle that Secretary Kissinger is expected to perform.
- It is clear that we will be called upon to produce, in an atmosphere of crisis, a number of political and economic estimates on the shape that this new crisis will take. If it goes on very long, Europe and Japan will be tempted to join the Arabs in a new relationship that excludes the US. The flaw in this policy for Europe, Japan and the Arabs is that with US influence out of the Middle East, they would not be left alone long to share their new relationship; the Soviets would be back. It seems to me that it would be useful if we were to attempt to set up some fairly black assumptions and, against them, write the scenarios of what will develop in the next six months if Secretary Kissinger fails to meet some of the very high hopes that are now harbored by the Arabs and particularly the Saudis.
James H. Critchfield5
- Source: Central Intelligence Agency, National Intelligence Council Files, Job 80–B01495R, Box 4. Secret. A copy was sent to Deputy Director of Central Intelligence Vernon A. Walters, Deputy Director of Operations William E. Nelson, Deputy Director of Intelligence Edward W. Proctor, and George Carver, National Intelligence Office.↩
- The Arab oil embargo was extended to the Netherlands on October 23 because of its support for Israel.↩
- See Document 226.↩
- See footnote 4, Document 231.↩
- Printed from a copy that indicates Critchfield signed the original.↩