85. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon1

    • Under Secretary Irwin’s Trip to Iran, Saudi Arabia, and Kuwait

At Tab A is a memorandum from Under Secretary Irwin reporting on his trip to the Middle East and his discussions with the leaders of Iran, Saudi Arabia, and Kuwait on the international oil situation.2 At Tab B is Irwin’s report on the status of the oil negotiations.3

Irwin points out that there was some initial suspicion of his trip as an attempt to put pressure on the governments visited but that he was well received. He emphasized the vital role of Persian Gulf oil in the economic and strategic well-being of the Free World, and the critical importance of avoiding a reduction or halt in production. He stressed to leaders he met the importance of reaching an agreement which would be fair to producing countries, consuming countries, and the oil companies; and that while the U.S. did not wish to become involved in the details of the negotiations between producers and companies, we were urging both sides to be cooperative and reasonable.

Irwin feels that the Heads of State of these countries are suspicious of the oil companies: they believe their countries have not been treated fairly over the years, and cite that in real terms they are receiving less for their oil than five years ago while paying more for imports. They stress their readiness to stand up to the oil companies, even to the extent of reducing or halting production. He feels that it is therefore necessary for the companies to convince the producing countries that they [Page 211] are negotiating seriously, and within the terms of reference and time frame set by the producing countries.

The Under Secretary also reports that the Shah indicated that he hopes you can visit Iran in 1971. In addition, he transmits a letter (Tab C) from King Faisal4 asking you to take steps to convince the companies to be realistic in their discussions and thereby facilitate reaching a solution.

The oil situation is being studied carefully by the Under Secretaries Committee. The key questions are the degree of U.S. national interest in the present negotiations, and how great a role we as a Government should therefore be playing in them.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 367, Subject Files, Oil 1971. Secret. Sent for information. According to a January 27 memorandum from Bergsten to Kissinger, forwarding this memorandum to Kissinger, the Irwin report “will be dated by the time it gets to the President.” Consequently, the memorandum to the President had been updated to reflect events, without details of “the rapidly developing negotiation situation.” (Ibid.)
  2. Attached but not printed at Tab A is Irwin’s January 25 memorandum to Nixon. Irwin concluded that the oil producing countries “stress readiness to stand up to the oil companies in the negotiations, even to the extent of reducing or halting production. Consequently, although I believe my trip gained a little time and impressed on the three governments a certain perspective heretofore lacking, I am not at all sanguine as to their final action unless the company negotiators can convince the producing countries that they are negotiating seriously and within the terms of reference and time frame of OPEC’s Caracas resolutions.”
  3. Attached but not printed at Tab B is Irwin’s January 25 report, “Status of Current OPEC Oil Negotiations.”
  4. Attached but not printed at Tab C is Faisal’s January 19 letter. See footnote 5, Document 76.