Foreign Relations of the United States, 1964–1968, Volume XXII, Iran

269. Telegram From the Department of State to the Embassy in Iran¹

Washington, March 16, 1968, 0048Z.

131326. Subject: Zahedi’s Washington Visit.

1. Following summary FYI, Noforn, uncleared and subject revision upon review.

2. Summary. Zahedi stressed seriousness to Secretary of Iran’s interest in obtaining more oil revenues and in protecting its interests in Gulf. He blamed British for formation FAA and indicated necessity for GOI be able respond to desires Iranian people in settling problems of Bahrein, Tunb and Abu Musa. Secretary urged Iran consider its actions in context total dangerous world situation.

3. Iranian FonMin Zahedi called on and lunched with Secretary March 15 accompanied by Amir-Teimur, Fartash, Ansary and Batmanglidj. Under Secretary Rostow, Davies, Farley, Saunders and Eliot also present.

4. Zahedi made lengthy presentation to Secretary on oil and Persian Gulf.

a. On oil Zahedi reviewed Iranian need for revenues to support development program and military requirements which have increased as result British decision withdraw from Gulf. He stressed Iran’s helpfulness in keeping its oil available during last June’s crisis. He asked whether it wise for oil companies depend so heavily on Arab oil and on Aden refinery. Iran thought that alliance and friendship with US and UK, actions in June crisis, and constructive attitude on many international problems would have resulted in different response. Iran doesn’t wish put oil companies in corner and threaten them and is open to suggestions. Consortium has been told what Iran’s requirements are and has been asked raise offtake and/or provide cost oil for Iran to market and/or invest in Iran. If Consortium unable respond, it must think of consequences.

b. Zahedi reviewed his discussion with Brown in London (State 130381).² Said Iran hurt by UK’s recent actions. Iran doesn’t desire anyone’s land, wants strong and healthy states on other side of Gulf and wants resolve small problems so that true friendship will prevail. Will not take Bahrein by force and will even risk wrath of public opinion by agreeing to plebiscite or some other way to solve problem. Zahedi reviewed Saudi-Bahrein communiqué, Fartash mission, cancellation Shah’s visit, Amir-Teimur mission, noting all instances of alleged Saudi misbehavior. He then mentioned formation of FAA,³ accusing British of double-cross. Problem with federation not only inclusion of Bahrein but also inclusion of Ras-al Khaimah and Sharjah and with them of Tunb and Abu Musa Islands. He said Iranian public cannot accept this and that if FAA is formally inaugurated on this basis March 31 British will have to accept consequences. He asked how Iran can stay allied to country which behaves in such a way. British tell Iran be patient, but for how long? In response Secretary’s question concerning role of British in formation FAA and expression of doubt British planned it, Zahedi and Amir-Teimur reiterated belief they had hand in it, citing Roberts’ telling Shah that UK favored federation of some of Sheikhdoms. Secretary also asked if FAA more shadow or substance and whether its formation would affect Iran’s relations with individual components. Zahedi indicated formation FAA on present basis would indeed interfere with Iran’s relations with Sheikhdoms.

5. In response Secretary said he hesitated give off-the-cuff response to such serious and far-reaching problems. He mentioned number of world problems, including Vietnam, Laos, Cambodia, Thailand, Burma, Korea, stirrings in Eastern Europe, economic situation in Free World. He noted that following June war Soviets felt sense of panic and loss of prestige. Stresses in Communist world and judgments they make concerning Free World produce situation pregnant with possibilities of crisis. Secretary said hard for us think about problems Zahedi raised except in framework world situation. We would be disturbed if Iran and UK at odds. Would be serious if Iranian actions would create inflammation in Arab world against Iran causing Arabs to look to Soviets for assistance. He expressed understanding how serious these problems are for Iran but stated they also grave in terms total world situation. It would be easy, he said, for US to counsel patience, but instead we ask Iran examine all consequences and alternatives in current dangerous world situations where clarity and wisdom in high demand. Secretary reviewed our strenuous efforts dissuade British from early withdrawal from Gulf. He mentioned knowledge some Iranians feel we not neutral in Iranian-Saudi problems and assured Zahedi this not so and that in fact we believe good Iranian-Saudi relations prerequisite to peace in Gulf and that they have identity of interest in preventing expansion Soviet influence in area. He said we deeply concerned about any match being applied to gunpowder anywhere. Shah one of best informed men in world and also wise man. Hopefully Iran would look at its problems in widest context. Secretary concluded by saying he could not speak from Mount Olympus and hoped discussions these subjects would continue through Ambassadors.

6. On oil, Secretary said we cannot dictate to companies. We hope both parties will continue to promote their mutually beneficial relations. We will keep in touch with companies. Rostow mentioned our strong interest in mutually satisfactory solution and asked if Iranians had discussed offtake from Abu Dhabi with British.

Rusk

1. Source: Department of State, Central Files, POL 7 IRAN. Secret; Limdis. Drafted by Eliot on March 15 and approved by Davies. Repeated to Dhahran, Jidda, Kuwait, London, and CINCSTRIKE/CINCMEAFSA.
2. Dated March 14. (Ibid., POL 15–1 IRAN)
3. The Federation of Arab Amirates (FAA) was formed in February 1968 by the rulers of the nine Gulf States—Bahrain, Qatar, Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Qaiwain, Ras al-Khaimah, and Fujairah.