Page 357 - Arabia the Gulf and the West

354 Arabia, the Gulf and the West

definitely considered’. However, he concluded, with a show of magnanimity, if
a five-year agreement on prices were concluded with the Gulf states, ‘we shall
stick to the agreement’ - provided, he added quickly, that the companies did
not raise their selling prices for oil and oil products.
Muhammad Reza Shah could well afford to wax belligerent in front of the
world’s press, for he knew full well (had he not been privately assured of it?)

that the oil companies could not count on the backing of their own
governments. Other excitable spirits in OPEC took courage from his vapour­
ing. Izzedin Mabruk, the Libyan oil minister, announced that Libya would not
accept any five-year agreement, and that if the oil companies did not accede to
OPEC’s terms, Libya would cut off oil to the West. Not to be outdone, the
Venezuelan oil minister inveighed against the Irwin mission, adding somewhat
obscurely, ‘If the British or the US governments had anything to discuss, they
should have adopted a more direct line rather than resort to other ways’.
The two halves of the companies’ negotiating team, which had returned to
London for consultations, left for Tehran and Tripoli on 27 January. They had
been instructed to adhere to the separate but connected approach and, in the
case of the Tehran team, to try to get the Gulf states to agree to a posted price

for Iraqi and Saudi Arabian oil delivered at the eastern Mediterranean
terminals of their respective pipelines. Such postings would then act as a
‘hinge’ between the Gulf and Mediterranean negotiations so as to forestall any
leap-frogging of prices. The Tripoli negotiation was very short-lived. The
Libyan oil minister rejected the joint letter presented by Piercy, indignantly
and (considering what OPEC was up to) rather quaintly accusing the oil
companies of acting as a ‘cartel’. Obviously the Libyans were going to await the
outcome of the Tehran negotiations and then leap-frog over the terms agreed

there. Piercy therefore returned to London.
In Tehran, Strathalmond and his team found the Gulf negotiators brimming
over with confidence, as well they might be; for, the Western governments
having forsaken the fight, the contest between the companies and thd Gulf
governments was an unequal one. At the very outset of the talks the Gu
committee refused to agree to set the eastern Mediterranean postings, which
effectively destroyed the ‘hinge’. Although Yamani promised that Sau
Arabia would not ‘leap-frog back from Sidon [the TAPline terminal] to Ras
Tanura [the Gulf loading terminal]’, the very fact that he volunteered is
assurance was a strong indication that this was exactly what he and his fellow 01
ministers had in mind. He may also have volunteered it to weaken the com

parties’ solidarity, which was already showing signs of cracking. It crac e
wide open on 30 January, when the Tehran team returned to Lon on or
consultations. Its members left again for Tehran the same evening wi
waiting for the arrival of the Tripoli team which was due at any .
much for separate but connected negotiations and the concert^ ^PP york
That same day the London Policy Group and a rump section of the ise