Page 346 - Arabia the Gulf and the West

The Masquerade 343

motivated by the RCC’s determination to force the United States to adopt a
pro-Arab policy in the Middle East. The claim needed to be taken with a pinch
of salt. There were as many good reasons for ascribing the Libyans’ behaviour
to sheer rapacity as there were for believing that it derived solely or even largely
from Qaddafi’s known Islamic fundamentalism, his hatred of Israel and his
detestation of Western civilization. Whatever the explanation, the companies
had little time to spare at the close of 1970 for speculation about the psycho­
pathology of the Qaddafi regime. What preoccupied their thoughts were the
serious dangers posed to the Western industrial nations, and to the oil­
consuming countries of the non-communist world in general, by OPEC’s
avowed intention to assume exclusive control over oil pricing and the fixing of
tax rates.
If the leap-frogging or ratchet tactics of OPEC over oil prices were to be

defeated, the oil companies would have to act in concert, to present a united
front to the organization just as it presented one to them. Late in December
1970 Shell took the initiative and set about persuading the other companies,
majors and independents, to form a joint negotiating body. ‘Our view’, the
chairman of Shell, Barran, explained later, ‘was that the avalanche had begun
and that our best hope of withstanding the pressures being exerted by the
members of OPEC would lie in the companies refusing to be picked off one by
one in any country and by declining to deal with the producers except on a
total, global basis.’ For the American oil companies to act together, without
rendering themselves liable to prosecution under existing United States anti­
trust laws, would require an undertaking from the United States government
that proceedings would not be instituted against them if they took a joint stand
against OPEC. An approach to the US Department of Justice to secure
its consent was made early in January 1971 by the veteran lawyer, John J.

McCloy, who had acted as counsel for the Seven Sisters on anti-trust matters on
several occasions in the past. McCloy was a man of considerable distinction and
influence who had been in his time assistant secretary of war, United States
high commissioner in Germany, president of the World Bank and chairman of
the Chase Manhattan Bank. He had foreseen the potential dangers to Western
interests from OPEC soon after the founding of the organization in i960, and
he had warned successive administrations in Washington that the day would
come when the oil companies would have to act together for their own and the
Western world’s protection.
On 11 January the representatives of twenty-three oil companies - the Seven
Sisters, the independents, Compagnie Fran^aise des Petroles, the Arabian Oil
Company of Japan, Petrofina of Belgium and Elverath of West Germany - met
in New York to decide upon the substance of a combined message to OPEC.
The text that was finally agreed on 13 January set out courteously but firmly the
view of the companies that the long-term interests of both oil-producing and
oil-consuming countries required that there should be stability of financial