Foreign Relations of the United States, 1964–1968, Volume XXXIV, Energy Diplomacy and Global Issues

259. Telegram From the Mission to the Organization for Economic Cooperation and Development to the Department of State¹

Paris, July 21, 1967, 1935Z.

1098. CEDTO. Subj: OECD Oil Committee Meeting, July 20–21. Ref: Paris 1087.²

1. By end of Oil Committee meeting July 21 there seemed to be little doubt in minds delegates that world oil situation somewhat graver than portrayed by industry group.³ Some delegates expressed disappointment that Oil Committee still not inclined move to action phase of OECD emergency plan but all agreed that in view relatively optimistic industry group study, such action could not be taken.⁴

2. Oil Committee concluded that task of transport, not shortage of crude, was main problem. But almost as important is possibility that certain products, namely naphtha and heavy fuel oil, will be in short supply soon.

3. Industry study was recognized as hurried and incomplete and group was charged with preparing new report early September. Representatives of all five countries (Austria, Spain, Portugal, Greece and Turkey) which have not supplied data to committee have said information on stocks, draw-downs and requirements by products will be submitted to industry group within two weeks. Other European OECD countries have agreed supply, as soon as possible, additional information required by group. Japanese delegate said Arabian oil company had not participated in industry group study only because company did not have representative in Europe but it was prepared submit any information group required.

4. Only other substantive action of Oil Committee was decision charge existing working group (US, UK, France, Germany, Italy, Netherlands, and Sweden) with task maintaining liaison with industry group. Proposal received strong support of entire committee (including French).

5. Not all members of working group will work with industry group at all times. Details of working group cooperation will be formalized by group itself. US delegate, who said US will appoint representative to group, suggested its first meeting with industry body be held shortly after EPSC completes its petroleum situation study which we expect to be considerably more detailed and probably more accurate than OECD industry group paper.

6. If subsequent data reveal that problem more serious than supposed, or if there is sudden deterioration of oil situation, Oil Committee can be summoned reconvene on short notice but next meeting tentatively scheduled for September 7.

7. US delegate also called attention of group to necessity maintaining high degree of security in talks; this was supported by German delegate, who fears that leaks of industry assumptions of renewal of shipments from Libya to Germany might imperil such deliveries. No one, however, has illusions about probability maintaining complete secrecy in meetings which include 21 governments and often as many 100 individuals.

8. Operative paragraphs of committee report OECD Council being submitted separately.

Trezise

1. Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 3 OECD. Limited Official Use. Repeated to Ankara, Athens, Belgrade, Bern, Bonn, Brussels, Copenhagen, Dublin, The Hague, Helsinki, Lisbon, London, Luxembourg, Madrid, Oslo, Ottawa, Reykjavik, Rome, Stockholm, Toyko, and Vienna.
2. Dated July 21. (Ibid., PET 3 OECD)
3. A report for the President’s evening reading on July 24 summarized the information that the committee had received. European oil stocks had been drawn down by 19 days—about one-third of the on-hand supply—and the British stocks were down by 28 days. Some countries were already experiencing shortages of naphtha and fuel oil. (Department of State, E Files: Lot 71 D 84, FSV Facilitative Service—1967)
4. According to a report received by the Department from the British Oil Attaché, the OECD Oil Committee would listen to the industry report but would not act. U.S. oil experts concurred: “The British conclusions may be correct. Interior believes that some of the international oil companies in the Industry Group may fear that some of their European clients would be alarmed by precipitous OECD action and will tend to sugarcoat the report.” (Memorandum from Oliver to Fried, July 14; National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, PET 3 OECD)