255. Memorandum From Harold H. Saunders of the National Security Council Staff to Secretary of State Kissinger 1

    • CIA Study of US Options Toward Saudi Oil Embargo

Mr. Colby has sent you the attached paper which examines the feasibility of four stages of action designed to alleviate the Saudi oil embargo.2 The focus is exclusively on means of pressure, rather than on combinations of sanctions and positive inducements.

In brief, the options considered are the following:

  • —Convince Sadat to urge Faisal to relax the embargo. Faisal is likely to be responsive to Sadat, and the Egyptian leadership will appreciate the need for avoiding confrontation with the US over oil. Iran is mentioned as another mediator, and the suggestion is made that the Saudis be asked to lift the embargo selectively—on Europe and Japan first, while looking the other way if transshipments are then made to the US. This would give the Saudis a face-saving way of backing down.
  • —If the Egyptian approach does not succeed, the message could be conveyed to Faisal through a variety of [less than 1 line not declassified] channels that the US is contemplating serious action against Saudi Arabia. This could be paralleled by [less than 1 line not declassified] contacts with Prince Fahd to judge his thinking. The idea could also be spread that we intend to rely primarily on Iran as an alternative to Saudi Arabia in the Gulf area.

[2 paragraphs (7 lines) not declassified]

It should be noted that the last two options are not analyzed carefully, but are simply put forward as possibilities.3 If the situation seemed to warrant such severe measures in the future, a great deal more thinking would have to be done on this topic. Among other things, we would need a careful assessment of Saudi capability to destroy the oil production capacity of the country in the event of militarization. Industry sources judge this to be very high.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 630, Country Files, Middle East, Saudi Arabia, Vol. IV. Secret; Sensitive. Sent for information. Kissinger initialed the memorandum.
  2. Attached but not printed is the November 23 paper, “U.S. Action Options in the Context of a Continued Total Saudi Arabian Oil Embargo.” A Treasury Department contingency plan, “Arab Vulnerability to US/Western Counteraction,” based largely on the CIA’s assessments, was also prepared. (Central Intelligence Agency, Office of Economic Research Files, Job 80–T01315A, Box 37) These are the contingency plans cited in Years of Upheaval, p. 880, and referenced in Document 244. A January 10, 1974, CIA review of possible military contingencies concluded, “for this moment in history King Faisal has the leverage to translate his assets into effective pressure on us in a way we can not match with ours without destroying the very objective we seek.” (Central Intelligence Agency, Executive Registry Files, Job 80–M01048A, Box 3)
  3. Critchfield informed Colby in a November 12 memorandum that the essence of the CIA position was that “the US has almost no economic or financial options for effectively putting pressure on the Arabs. We acknowledged there were political options but that these were currently subordinate to the diplomatic effort.” He concluded, “Hopefully, we have put this particular effort to rest.” (Ibid., Office of Economic Research, Job 80–T01315A, Box 37)