142. Telegram From the Department of State to the Embassies in the United Arab Emirates, Kuwait, and Qatar1

306595. Subject: Expression of Appreciation re OPEC Decision.

1. Action addressee Ambassadors should, at earliest opportunity, express at appropriately high level satisfaction of USG that oil prices were not raised at Caracas OPEC meeting2 and USG appreciation for the efforts of those OPEC governments which worked to prevent the price increase. You may wish to draw on Dept’s December 22 statement [Page 467] on this subject (State 305543)3 noting our mutual conviction that any price increase would have been damaging to international financial markets and the world economy and would have aggravated the already difficult economic situation of many developing countries. You may wish to note that position of those Gulf countries opposing an increase appears to us to underscore the strong common interest between the Gulf countries and the industrial world, including the US, as well as that cooperation among Gulf states which US policy has long welcomed. You should stress that the OPEC decision will help our efforts to sustain economic expansion and reduce inflation and that we particularly welcome indications that leaders of a number of oil producing countries oppose any price increase through at least the full year 1978. Over coming months we will want to continue our dialogue with the Gulf governments about the international economic situation and the effect of oil prices on it. You should also note that for our part the US recognizes the need to press ahead with the enactment of a strong domestic energy program.

2. FYI: Separate messages are being conveyed to Jidda and Tehran.4 End FYI.

  1. Source: National Archives, RG 59, Central Foreign Policy Files, D770480–0553. Confidential; Immediate. Drafted by Twinam, cleared by Bosworth, and approved by Sober. Repeated Priority to Tehran and Jidda.
  2. The second OPEC summit conference was held December 20–21. On the second day, the Embassy in Caracas reported: “The Caracas OPEC conference concluded with a freeze on oil prices for at least six months, but little else. The price issue was discussed, and while the members could not agree on an increase, there was no open split as had occurred a year ago. Pres Perez’s proposal to increase assistance to the third world apparently fell on deaf ears, in part possibly due to his over enthusiastic efforts to promote it among the assembled OPEC Ministers.” (Telegram 12394 from Caracas, December 22; ibid., D770479–0764) Previous reports on the conference are in telegrams 12330, 12331, and 12367 from Caracas, December 21. (All ibid., D770475–1016, D770475–1252, D770476–0675)
  3. Telegram 305543 to all diplomatic posts, December 22. (Ibid., D770478–0800)
  4. Carter sent a personal message to Khalid on December 23 expressing his “sincere appreciation” for Saudi Arabia’s “successful efforts to prevent an increase in oil prices.” He added that he was “heartened by press reports” of a statement by Yamani that “there would not be any increase in oil prices throughout the year 1978” and concluded that he intended to “push ahead with the enactment and implementation of a meaningful domestic program of energy development and conservation.” (Telegram 306484 to Jidda; ibid., D770480–0341) He also sent a message to the Shah on December 23. (Telegram 306483 to Tehran; ibid., D770480–0340)