Office of the Historian

1. Telegram From the Department of State to the Embassy in Lebanon1

Washington, January 6, 1964, 6:20 p.m.

616. Embtel 611.2 Cairo Summit.3

In your discussion with President Chehab you should be cautious re effect on West of cutting off of Arab oil.4 Begin FYI: US/UK oil talks held in Washington last June5 concluded: (1) In event of a transit crisis, involving the denial of the Suez Canal and Middle East pipelines, by bringing into service available surplus of tankers and after establishment of new pattern of supply it should be possible to meet OECD Europe’s full normal demand by end of three months. However during period of supply readjustment, in first 90 days of such emergency, a shortfall of about 7-1/2 percent of normal supply would result in OECD Europe which probably could be accommodated by stock run down of about seven days. Supply to all other Free World areas would continue to be fully maintained.

(2) In event total denial of Middle East oil (definition Middle East includes Iran but excludes Libya) and no increases in production from OPEC countries outside Middle East, the Eastern hemisphere as a whole could be satisfied only to the extent of approximately one-half of normal demand. Further alleviation of Eastern hemisphere shortfall could be accomplished by rationing of supply in Western hemisphere countries. (In point of fact we think it highly unlikely that Iran and Venezuela [Page 2] would join Arab producers in cutting off oil to West over what is in essence Arab-Israel issue.) End FYI. Suggest you develop presentation along following lines. Aside from disruptions in economies of Near East producing countries as result oil cut off there would be serious though not insurmountable problems facing countries of Western Europe. US of course has sufficient capacity meet own needs and US and other countries outside NE would be in position provide relief Western Europe in emergency. However, ultimate result cut off would be force major consuming countries band together for own protection against NE producing countries and greatly stimulate development alternative energy sources i.e. atomic power, European gas, coal, tar sands, shale; all of which have promising future depending upon economics of situation. Should Near East come to be considered unstable source of petroleum supply with perennial threat of cut off for political reasons, West would develop alternative sources irrespective of cost.

Rusk
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964-66, POL 7 UAR. Limited Official Use. Drafted by Slator C. Blackiston, Jr., (NEA/NE); cleared by Director of the Office of Near Eastern Affairs Rodger P. Davies, in substance by Chief of the Fuels and Energy Division Andrew F. Ensor of the Office of International Resources, and Officer in Charge of Lebanon-Israel Affairs H. Earle Russell, Jr.; and approved by Jernegan. Repeated to Cairo.↩
  2. In telegram 611 from Beirut, January 6, Ambassador Meyer stated that in his talk with President Chebab regarding the forthcoming Cairo summit conference, he would like to be able to say that while cutting off Arab oil would create problems for the West, it would by no means be fatal. (Ibid.)↩
  3. The heads of state of 13 Arab nations met in Cairo, January 13-17. The conference reached agreement on a three-part program of action: 1) a joint Arab project to divert large quantities of water from the headwaters of the Jordan River; 2) establishment of a unified Arab Military Command under Egyptian leadership; and 3) creation of a “Palestine entity” that would represent Palestinians in the Arab League.↩
  4. For documents relating to U.S. international oil policy, see Foreign Relations, 1964–1968, vol. XXXIV, Documents 175 ff.↩
  5. For the conclusions of the U.S.-U.K. oil talks in Washington, June 10-14, 1963, see ibid., 1961–1963, vol. XVIII, Document 291.↩