81. Memorandum of Conversation1


  • Zaki Yamani, Minister of Petroleum and Natural Resources
  • Henry A. Kissinger, Secretary of State
  • James E. Akins, U.S. Ambassador to Saudi Arabia
  • Joseph Sisco, Under Secretary of State for Political Affairs
  • Robert Hormats, Senior Staff Member, National Security Council (Notetaker)


  • Oil Price Increase and the Producer-Consumer Dialogue

Secretary Kissinger: I am extremely pleased to see you again.

Minister Yamani: It is my pleasure, and I am glad you could visit Saudi Arabia.

Secretary Kissinger: I have read of some conversations in which you indicated that you believed that the US was embarking on a policy of getting tough with Saudi Arabia. I just wanted to tell you personally that this is not our policy. If you believe everything that Joe Kraft2 writes, you will be in very bad shape.

Minister Yamani: Well, we have heard of this and are concerned.

Secretary Kissinger: Let me assure you that you have nothing to be concerned about. There is absolutely no truth to this. It is certainly not our policy.

I would like to discuss two other issues briefly: an oil price increase and the consumer/producer dialogue.

On the issue of an oil price increase, I won’t go into the economic issues. You know these far better than I do. I am no expert. But I will comment on the political side. A price increase will be used by our opponents in the US—by those opponents of our policy toward the Arab World. They’ll say we are not tough enough with the Arabs knowing full well that if we get tougher the Arabs will retaliate. This would worsen the climate between the US and the Arab World and will be very harmful to our efforts to improve relations with the Arabs and to our efforts in the Middle East. The cost will outweigh any conceivable economic benefit.

Minister Yamani: Sometimes we are confused. When His Highness Prince Fahd was in Tehran, the Shah told us that your view was that it was necessary to have a price increase.

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Secretary Kissinger: It is not conceivable that that could be portrayed as my view.

Minister Yamani: Well, the US view. They said that it was your view that an increase was needed to help you increase your independence. But our view is that we do not want an increase. In fact, we have sent a message to the Shah from the King against a price increase. The Shah wants a large increase of perhaps 20%, more than $2 per barrel. He thinks that OPEC might compromise at about 15%, and he would go along with this. The Shah is the one who wants an increase. We in Saudi Arabia do not and have said so. But you must convince the Shah.

Secretary Kissinger: If the price of oil goes up it will lead to massive political problems for our efforts in the Middle East. It would also have enormous economic consequences which you know.

Minister Yamani: We know your views. We are not in the forefront of those who want a price increase. That is not our traditional position. But your views should be told to other OPEC countries who feel differently.

Secretary Kissinger: When I return, the President will send a message to the Shah so he can be under no misconception about our attitude on this.

Minister Yamani: We will, of course, be talking to other OPEC countries as well. But you must understand that we really do not know what to make of what we read about the US tough line. This obviously has influence on our position.

Secretary Kissinger: I can assure you there is no tough line. It is pure newspaper idle speculation. There is no truth to it. I give you my personal assurance.

With respect to the consumer/producer conference, it is coming out along the lines you and I discussed. You must accept total victory.

Minister Yamani: What?

Secretary Kissinger: Yes, total victory. This is very much, almost exactly, what you wanted.

Minister Yamani: We have worked hard on this.

Secretary Kissinger: You played a very constructive role. When I think back, we are very close to what you and I discussed.3

Minister Yamani: There seem to be some issues not yet agreed.

Secretary Kissinger: Do you think that Saudi Arabia and the US can discuss how we can proceed in these meetings. We need to coordinate closely in our mutual interest.

Minister Yamani: Yes, but we have many differences, too.

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Secretary Kissinger: Yes, but we have many areas of agreement. These outweigh any differences. And I am not aware of major differences.

Minister Yamani: Well, I think we can work closely.

Secretary Kissinger: Chuck Robinson will be in touch with you. He is working closely on this. Of course, you are always welcome to be in touch with me.

Minister Yamani: I might be in Washington in the first half of September, but only for four or five days.

Secretary Kissinger: Let me know when you will be there. Maybe we can have lunch or tea or something. I would very much welcome visiting with you again.

Minister Yamani: It is very nice to see you here in Taif, and I look forward to seeing you again in Washington.

Secretary Kissinger: It is important that we work closely together, and I will welcome your visit.

  1. Source: National Archives, RG 59, Central Foreign Policy Files, P820123–1520. Secret; Nodis. The meeting took place in the King’s compound.
  2. Syndicated newspaper columnist Joseph Kraft.
  3. See Document 55.