Behind the Headlines Oil Slick in Mideast Politics

Oil is America’s most important business in the Middle East, the Persian Gulf and the Arabian Peninsula. Now the government and private oil firms, caught in the crunch of a so-called energy crisis at home and demands by Arab governments that the U.S. reverse its Mideast policy regarding Israel, are walking an economic and diplomatic tightrope. The Administration is under growing pressure by the powerful oil cartels through their lobby in Washington to protect their investments and economic future in the oil areas.

The Arab governments are vowing to curtail the oil flow and threaten to nationalize and confiscate the billions of dollars worth of equipment and capital. But the Administration also feels a deep moral obligation to support Israel as the democratic oasis in a desert of feudal sheikdoms

However, two events in as many weeks indicate once again that moral obligations and economic necessity do not always coincide in the world of realpolitik. The first event was a letter issued by Standard Oil of California. The second was a television interview with Assistant Secretary for Near Eastern and South Asian Affairs, Joseph J. Sisco. The first created a storm. The second one passed unnoticed, almost.

On July 26, SOCAL sent a slick letter to its 40,000 employes and 262,000 stockholders noting that the U.S. is not producing enough oil and gas to meet the overall demands for these energy resources. This, the letter stated, raises a “key question,” namely, “From where is all this oil to come?”

Not one to waste too much time, Otto N. Miller, chairman of the board of SOCAL, came right to the point and stuck to it for the remaining 350 word letter. “Obviously,” he wrote in answer to his question, “we must look to all parts of the world, but primarily to the prolific oil fields of the Arab/Persian Gulf area which contains almost two-thirds of the Free World’s oil reserves.”

FULSOME PRAISE FOR ARABS

Recounting SOCAL’s “long association with the Gulf area” including an “historic agreement” in 1933 with King Abd al-Aziz “to explore and develop the Eastern segment of Saudi Arabia,” Miller opened the tap to permit the full rush of his view to flow through. He stated: “There is now a growing feeling in much of the Arab world that the United States has turned its back on the Arab people. Many are said to feel that Americans do not hold in proper regard the national interests of the Arab states….”

Miller then proceeded to present what amounts to three directives: “It is highly important at this time that the United States should work more closely with the Arab governments to build up and enhance our relations with the Arab people” because of America’s long history and friendship and cooperation with the Arabs, “more than 100 years”; “it is in the best interest of all of us who are citizens of the United States to urge our Government to work toward conditions of peace and stability”; and “…it is in our mutual interest to encourage a United States Government course which recognizes the importance of these objectives to the future of all of us….”

What makes this letter interesting is that while it notes in passing that “We must acknowledge the legitimate interests of all the peoples of the Middle East” and suggests a course “which above all seeks a peaceful and just settlement of conflicting viewpoints,” there is not a single mention of Israel’s existence nor its interests nor viewpoint regarding a just settlement in the Mideast. In fact, when Miller mentions the long-standing U.S.-Arab friendship he notes that this involves “cultural relations which encompass education and religion, as well as commercial trading.”

SUBLIMINAL ANTI-ISRAEL THRUSTS

Miller’s subliminal anti-Israel thrusts are highly impressive: “more than 100 years of friendship,” in other words, remember that Israel doesn’t have any seniority; “all of us who are citizens of the United States,” in other words, don’t let those who live here but are loyal to foreign interests pressure the government; relationships which encompass religion, in other words, remember that there are more Christians and Moslems in the Middle East than Jews.

What makes this letter particularly enticing is the date it was written: July 26. That was the day when the U.S. vetoed an anti-Israel draft resolution in the Security Council. Miller’s explanation yesterday (see separate story) of what he meant to convey in his letter of July 26 can only be viewed as a rationalization under pressure.

But in the justifiable protests against the letter, the second development appears to have been overlooked or, until now, at least, ignored. Several days after Miller’s letter was made public, Sisco presented to an Israeli television audience his view of American interests in the Middle East, the Persian Gulf and the Arabian Peninsula. He said that “while our interests in many respects are parallel to the interests of Israel, they are not synonymous with the State of Israel.” Sisco then drove home the point when he observed: “There is increasing concern in our country, for example, over the energy question, and I think it is foolhardy to believe that this is not a factor in the situation.”

Questions: Were the statements by Miller and Sisco coincidental or interrelated? Was Sisco’s statement a hint to SOCAL and the Arabs that U.S. diplomatic pipelines in the Mideast are not merely conduits for Israel? Was Miller’s letter written with some realization that it would stimulate a favorable State Department reflex? Was Sisco’s statement off the cuff or cleared first with the State Department? Was Sisco’s statement one of policy or an emphasis on the obvious?

THE SAUDI ARABIAN CONNECTION

There is some indication that Miller’s letter and Sisco’s statement are linked by the Saudi Arabian connection. Research indicated that oil firms, eager to maintain and expand the profitable role in Saudi Arabia, have, invested $700 million in that country in the last 12 months in order to increase capacity to nine million barrels a day, after assurances that Saudi Arabia would not use oil as a weapon. Oil firms are now taking eight-and-a-half million barrels a day and the goal is to increase production to 20 million barrels a day by 1980.

This kind of investment and the prospects envisioned by the oil firms require more than a quick smile and a passing handshake between the feudal oil sheikhs and U.S. Administration officials, and more than a veto, so far as the oil companies and the sheikhs are concerned. It requires, as Miller phrased it, “understanding on our part of the aspirations of the Arab people and more positive support of their efforts toward peace in the Middle East” and “reinforcing bonds of friendship between our two peoples that were forged decades before.” The need for this kind of support can also be inferred from a June 1 report by Shell Oil titled. “The National Energy Problem: The Short-Term Supply Prospect.” On page 17 of that report is the observation that “greatly increased amounts of crude oil must come from foreign countries.” This is followed immediately by an expression of concern, namely, “Since the United States has no control over production rates or political actions in foreign countries, the matter of security and availability of supply naturally arises.”

CAUGHT IN A TUG OF WAR

The basic anxiety over production rates, political actions, security and availability is currently exacerbated by Saudi Arabia, a long-time friend of the U.S., which is under strong pressure from other Arab states to curtail oil production if America does not find a way to help achieve a political settlement favorable to the Arab states. Incidentally, SOCAL along with Mobil are partners in the Arabian-American Oil Co. (ARAMCO). In addition, the U.S. is seeking ways to reduce chances of nationalization and confiscation of oil firms’ property and equipment and how to deal with the Arab governments if the threats are carried out.

The Administration is undoubtedly caught in a tug of war between the pressure of the oil lobby and its obligation toward Israel. The U.S. veto in the Security Council was a diplomatic gesture but hardly a world-shaking declaration on behalf of Israel. Sisco’s statement, however, put it on the line in terms of economic interests: the tangible of oil and cash flow.

There is no doubt, too, that the Nixon Administration, under heavy fire on all sides over the Watergate affair and Vice-President Spiro Agnew’s impending legal tangle, needs a victory somewhere. Achieving peace in the Middle East would give the Administration a diplomatic victory, assure the stability of the current Arab regimes and thus eliminate the anxiety about investments, production rates and availability of oil supply and win the confidence of the economically powerful at home and the oil-soaked sheikhdoms that the Administration is capable of protecting its own. In the world of Mideast real-politik, moral obligations can easily skid on an oil slick.