840.6362/7–2545: Telegram
No. 1323
The Petroleum Administrator for
War (Ickes) to the Representative on the Allied Commission on
Reparations (Pauley)1
119. For Pauley from Ickes.
Reurmemo June 162 following summarizes reply mailed you at Potsdam and Moscow:
Realize serious coal shortage facing Europe.
Current petroleum program covering more than twelve months provides for supplying European requirements from various sources on shorthaul basis. Western Hemisphere major source of supply, primarily delivering products. Program includes supplying crude for those European refineries that can be effectively utilized.
Middle East has adequate potentialities as petroleum supply source for Europe. I have taken steps looking toward orderly development [Page 1386] of that area. Increased crude production used primarily in Persian Gulf refineries, leaving little crude available for export. Recently arranged supply Southern French refineries, when reopened, from Iraq and Saudi Arabia. Working on crude for other Western European refineries expected reopen within few months. Approval given construction of pipeline permitting movement Kuwait crude to Persian Gulf by first next year. This crude then available European refineries at time when all Saudi Arabian crude will be used in Persian Gulf refineries.
Everything possible being done to make Middle East oil available for export accessible to Europe. Tremendously increased military requirements make any sizable increases unlikely in near future. Products from Middle East refineries continue to go to military in Pacific on shorthaul basis. Therefore crude or product supply from Middle East available for Europe not large quantity compared to European needs.
Therefore assistance to liberated European countries in coming months must come primarily from other sources, one appearing to be Eastern European countries believed to have excess petroleum production over requirements. Early agreement with Russians on this oil would help greatly in relieving critical situation in Western European countries.