83. Telegram From the Department of State to the Embassy in the United Kingdom1

16596. Ref: London 866.2 Subj: Position on Oil Negotiations.

USG continues fully support coordinated approach by companies and governments of consuming countries in coming crunch on oil negotiations, and we will promote this end wherever possible, including through OECD.
We, of course, are in no position to judge whether oil company offers to Persian Gulf countries are or are not reasonable in present circumstances. If companies believe they can make no further offers and must break off negotiations, with all the consequences that may ensue, that is for them to decide.
We are equally in no position at this time to say what our position would be in regard to hypothetical marketing arrangements and other commercial matters, should Persian Gulf producers take drastic actions.
We will, of course, remain in close communication with companies and governments (we are now informing OECD members of latest developments—see septel)3 and we will continue to consult with parties concerned as the situation develops.
  1. Source: National Archives, RG 59, Central Files 1970–73, PET 3 OPEC. Secret; Priority; Limdis. Drafted by Clark on January 30; cleared by Davies; and approved by Trezise. Repeated to Paris.
  2. Dated January 30, telegram 866 noted that Heath had been informed that BP and Shell would stand firm against OPEC demands, because to do otherwise “would mean end of international companies and impossible burden for many consuming nations.” BP was also concerned about U.S. support. (Ibid.)
  3. Presumably a reference to telegram 16652 to all OECD capitals, February 1. (Ibid., POL 33 PERSIAN GULF)