623. Telegram From the Department of State to the Consulate General at Dhahran1
204. For Ambassador Wadsworth. Director Defense Mobilization planning issue in immediate future announcement summarized as follows:
Secretary of Interior will put into effect plan of action under which 15 US oil companies will coordinate efforts they have been making individually to solve oil supply problem created throughout the world by closure Suez Canal and severance some ME pipelines. Current transportation problem means reduction consumption and that output of oil cannot be maintained at normal levels in some producing areas such as ME. US desires cooperate as much as possible in lessening effects present situation in both consuming and producing countries. Contemplated coordination of industry efforts will ensure the most efficient use of available tankers for oil shipments. Even so there will remain substantial shortage in supply which cannot be overcome in some areas so long as Suez Canal remains closed and pipelines unrepaired. End summary.
You will note statement refers to coordination US company efforts and does not refer directly to UK-France. FYI However, in actual practice US companies would be working with foreign companies as they are to some extent at present time. End FYI.
Purpose Depcirtel 435 and Deptel 1822 was, of course, to prepare King Saud for such action. There is one point your conversation with King contained Dhahran’s 2433 which indicates possible misunderstanding which you may wish urgently to clarify i.e., your statement that UK-French forces would have left Egypt before our redistribution plan could be brought into effect.4 This connection, while implementation plan will follow assurance that UK and French forces will in fact withdraw, it was not contemplated that plan would be completely withheld pending full withdrawal. To do so would place undue heavy burden upon European and Asian consumers [Page 1213] of oil and ME oil producing countries. Such punishment would do irreparable harm and would serve no useful purpose.
In further clarifying US position you should emphasize our concern for countries other than UK and France, pointing out that UK and France control adequate transportation facilities to meet their own petroleum requirements if they wished to do so at expense of other countries which UK and French interests have traditionally supplied.
In general our purpose re Saud is to inform him in advance of US actions of direct interest to him; to assure him that his interests are foremost in our minds; to demonstrate that actions which we propose are entirely consistent with our efforts to bring peace to the ME and withdrawal of foreign forces from Egypt; and to elicit his sympathetic attitude toward measures designed to meet critical needs of many countries throughout world who have no responsibility for recent ME developments. We attach utmost importance to his understanding our policies and motivations in matters of mutual concern.
You might find it possible discreetly to use fact that Soviets have offered large amounts of oil to various countries including France. This demonstrates not only Soviet duplicity but obvious Soviet effort to inject itself as supplier of oil as substitute for Saudi Arabia and other ME producing countries.5
- Source: Department of State, Central Files, 880.2553/11–2956. Secret; Niact. Drafted by Rountree and approved by McAuliffe. Repeated Niact to Jidda.↩
- Documents 608 and 586.↩
- Document 616.↩
- On November 28 in a letter to Hoover, Deputy Secretary of Defense Robertson expressed his concern over this aspect of Wadsworth’s report of his conversation with King Saud, and recommended an approach to the King that would minimize the shock to him of any possible U.S. action. (Department of State, Central Files, 880.2553/11–2856) Hoover assured Robertson in a note dated November 29 that no action would be taken without the advice of the Cabinet Committee.↩
- According to the notes of the Secretary’s Staff Meeting for November 30, the following comments were made concerning the instructions sent to Wadsworth in telegram 204: “After reading the actual cable on which this report was based Mr. Phleger said he believed we should make it quite clear that King Saud does not have veto rights over the extraction of oil from his country since legally by the terms of the concession the oil belongs to the US concessionaire for whatever purpose he intends to put it. He said he realized that an unfortunate precedent had already been created with respect to Israel, but that withholding oil in such countries as Sweden and Norway was very difficult; and that if enough of these precedents developed, they could prove detrimental to US security. Mr. Phleger also said that the US should not get itself in the public posture of using the control of oil to force the UK and French withdrawal from Egypt. He observed that withholding oil publicly might actually retard the withdrawal. Messrs. Murphy and Elbrick then advised of the ODM press release to be made at noon today.” (Ibid., Secretary’s Staff Meetings: Lot 63 D 75)↩