WASHINGTON (Dec. 19)
President-elect Jimmy Carter declared yesterday that his Administration’s Middle East policies will not be influenced by the price of Saudi Arabian oil. “I don’t believe an oil-price decision should be a factor in ultimate decisions concerning the Middle East,” he told reporters at a press conference in Plains, Ga.
However, Treasury Secretary William Simon said today on NBC-TV’s “Meet the Press” that Saudi Arabia’s “position of moderation” would “provide the new Administration with a potential breakthrough” in its efforts to bring about a Middle East settlement. He added that he is “extremely pleased” with the Saudian position,. Simon, who was this country’s former energy chief, made these comments when asked whether the U.S. should give Saudi Arabia favorable treatment in its Mideast policies in return for the lower price increase.
Carter was responding to Friday’s statement by the Saudi Arabian Oil Minister, Ahmed Zaki Yamani, that he expected the West and especially the United States, to show “appreciation” for Saudi Arabia’s opposition to the 10 percent increase in oil prices agreed to by the Organization of Petroleum Exporting Countries (OPEC) nations at a meeting in Qatar last week. Saudi Arabia and the United Arab Emirates (UAE) announced that they would raise the price of their oil by only five percent.
Their move was widely interpreted as a signal to the United States to press for an early resumption of Arab-Israeli negotiations next year and, by implication, to exert strong pressure on Israel for major concessions. Most observers here agreed that this development, with its far-reaching economic and political ramifications, makes a settlement of the Middle East conflict the top priority facing the Carter Administration in the foreign policy field when it takes office Jan. 20.
INITIALLY WELCOMED BY CARTER, FORD
The Saudian and UAE decision to limit their oil prices was welcomed initially by the Carter camp and the Ford Administration. Secretary of State-designate Cyrus Vance praised the “courageous and statesmanlike action” of Saudi Arabia in a statement Friday and said that Carter would send messages of appreciation to the Saudian and Emirate governments. Carter’s press secretary, Jody Powell, told newsmen Friday that the President-elect “appreciates the statesmanlike action of the Saudis and Emirates.”
However, Garter stressed in his news conference yesterday that in his earlier messages to Saudi Arabia urging restraint in oil prices, both he and Vance had given “no insinuations” that “special consideration” would be given to Saudi views “or in Middle East political decisions because of their actions on the oil price levels.”
President Ford, on Friday, called the 10 percent oil price rise ordered by the 11 other OPEC nations irresponsible and fraught with destructive consequences. But in a separate statement he praised the Saudis and the UAE for refusing to go along with the price hike.
A CLEAR WARNING SOUNDED
The Saudian message was obviously directed less to the Ford Administration, which leaves office in little more than four weeks, than to the incoming Carter Administration. Both the State Department, under Secretary of State Henry A. Kissinger and the Carter team have stressed that they opposed any linkage between oil prices and political moves in the Middle East. Nevertheless, annalist point out, there always has been an implicit link and the Saudis have now made it more explicit.
Yamani’s announcement contained a clear warning that Saudi Arabia retained the initiative to boost the price of its oil if it was not satisfied with the course of Middle East negotiations. Economists here said that even with the Saudis holding the line, U.S. oil imports would cost about $7 billion more next year or over $40 billion. The U.S. imports about a million-and-a-half barrels a day from Saudi Arabia and the UAE which is about 30 percent, of OPEC’s output U.S. consumption is 17 million barrels a day of which seven million are imported.
The U.S. economy has still not fully recovered from the Arab oil embargo and subsequent price increases that followed the Yom Kippur War. The memory of that episode and the possibility of sharp new increases are expected to have strong effects on public opinion, especially in the business and industrial community, which could be translated into public pressure on the Carter Administration to move vigorously to end the Middle East impasse.