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Oil and U.S. Foreign Policy in a Nutshell

by Michael Levi
July 21, 2011

The State Department yesterday released Foreign Relations of the United States, 1969–1976, Volume XXV, Arab-Israeli Crisis and War, 1973 (PDF). Oil, of course, played a central role in that conflict. The following excerpt from the transcript of an interagency meeting held on October 7, 1973 tells you everything you need to know about how oil fits into U.S. foreign policy. Read to the end.

Secretary of State Henry Kissinger: Now, what about the oil situation?

Deputy Treasury Secretary Bill Simon: Our situation will be bad anyway. (referring to the papers at Tab B) As you see, we need an additional 350–700,000 barrels per day, depending on the severity of the winter. We should have been bringing in this much more during the past five or six weeks. So we’re in a situation where, in the heating season, we have to play catch-up ball. The Europeans can’t refine that much. They’re probably sitting around discussing this just as we are, and saying that they will protect their supplies and they won’t export to us. New England will be very cold this winter. We would have had problems even if this trouble hadn’t happened.

(Secretary Kissinger returned)

Deputy Defense Secretary Bill Clements: No one is telling it like it is on the fuel oil shortage. We would have had a bad problem even without this.

Secretary Kissinger: Some day I would like someone to explain to me how this happened. Can we develop a plan that, if there is a cut-off, what can we do? What does the President say on the day of the cut-off?

Mr. Simon: He institutes rationing. There will be a lot of argument, of course.

Secretary Kissinger: What is the argument against it?

Mr. Simon: Bureaucratic. The same as we had over the mandatory allocation. They talk about it’s affecting the middle of the barrel, but I say you can’t do that without affecting the whole barrel.

Secretary Kissinger: (indicating Messrs Simon and Clements) Does anyone here understand what these two are talking about?

I suspect that policymakers are still asking the same question today.

Post a Comment 2 Comments

  • Posted by Peter Duveen

    These days, it would seem that, in a world awash in oil, the question is more, who gets a piece of the revenue stream, rather than in the supply of oil itself.

  • Posted by Hans Nicolaisen

    More to put in the nutshell…

    Some years ago, a highly placed person at CERA (who shall remain anonymous) told me the US was prepared to use nukes, if necessary, to keep Mideast oil flowing.

    That seems to be a bit of an oxymoron, but it was (and maybe still is) part of largely unnoticed US policy.

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