284. Memorandum From the Executive Secretary of the Department of State (Tarnoff) to the President’s Assistant for National Security Affairs (Brzezinski)1
SUBJECT
- The Iran–Iraq Conflict
Described below is the summary outcome of an interagency meeting on the Iranian-Iraqi conflict held today, chaired by Hal Saunders, which aimed at anticipating SCC needs for information or policy suggestions. Participants also reviewed the prospect of new problems and new opportunities emerging from the crisis.
1. Dealing with the energy implications:
Discussion: We must prepare for two contingencies: (a) If the present curtailment of Iranian and Iraqi oil shipments continues for 2–3 months, there will be psychological pressure on prices. Consumers heavily dependent upon Iraq—France, Brazil, and India for instance—might feel strongly inclined to resort to the spot market, adding to price pressures. (b) If exports from a significant number of other Gulf producers are also curtailed, we should have assessed the consequences in advance and readied steps to minimize them.
Decisions:
—to ascertain precisely how much oil the Iraqi pipelines to the Mediterranean through Turkey, Syria, and now Lebanon could handle and, conversely, the consequences of shutdown. (Action: State/EB, State/INR, DOE, Treasury, CIA)
—to estimate how partial or total further curtailment of Gulf oil production and shipments (caused by harassment of shipping, damage to facilities, political actions, etc.) might affect the world energy scene. (Action: DOE, State/EB, State/INR, Treasury, CIA)
—to prepare a paper analyzing in what fashion France and Brazil, among other major consumers of Iraqi oil, might be protected adequately, noting that France has a closer connection with the IEA than Brazil. (Action: DOE, State)
—to consider preparing a cable to appropriate posts providing our assessment of the oil situation, and how key consuming countries could best deal with the situation through inventory management and [Page 895] care in entering the spot market. The principal objective would be to avoid driving prices up. (Action: State/EB, with DOE and Treasury)
—to identify countries where we have important military strategic understandings, aside from major states such as France and Brazil, which might be affected by the oil situation. The ultimate purpose might be to provide such countries special help in bridging future supply problems. (Action: State and DOD)
—to consider consulting with the major oil companies to assess the market picture and potential problems with the most seriously affected nations. (Action: DOE and State, after consultation with the Justice Department)
—to consider contingency discussions with major producing states on accommodating short-term demands and helping to bridge problems. (Action: State/EB, DOE, Treasury)
—to investigate whether the new tanker routing in the Gulf ordered by Iran will prevent or imperil movement of the largest tankers. (Action: State/EB, with Commerce)
—to continue an informal interagency oil group to monitor these problems, which would not cut across the Carswell efforts. (Action: State, DOE, Treasury)
—to consider an early IEA Governing Board meeting to discuss coordinated action. (Action: State and DOE)
[Omitted here are discussion and decisions on “efforts to end the war and mediate the crisis.”]
- Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 34, Iran/Iraq, 9/80. Secret; Exdis.↩