Page 412 - Arabia the Gulf and the West

The ‘Sting1 409

translated, meant when a serious fall in revenue might result. While the greatly
increased prices acted as a cushion against such a fall, the smaller oil states

could not bring their production down to the levels of which the Saudis and
Kuwaitis were boasting. A compromise, therefore, was necessary, and it was
found in the 25 per cent reduction - in which, significantly, the proportion
of oil normally exported to the United States and the Netherlands was
included, thereby diminishing the impact of the cut. A further reduction of 5

per cent was scheduled for December.
A degree of uncertainty also reigned over the quantities of oil some consum­
ing countries were to receive. (Kuwait and Abu Dhabi, for instance, had not
yet supplied lists of approved countries to the oil companies.) France, Spain
and Britain were on the ‘most-favoured’ list, along with certain Muslim
countries. West Germany, Italy, Japan, India and Brazil were in the ‘limbo’
category, subject to a 10 per cent reduction in supplies. Denmark, Belgium

and Luxembourg had apparently been overlooked. A good deal of attention
was given to Japan’s position, since the Japanese relied almost exclusively upon
the Middle East for oil, and they were fearful of the possibility of any diminu­
tion in supply. In the last week of October the Japanese foreign minister had
told the Arab ambassadors in Tokyo collectively that his government sup­
ported Arab demands for the restitution of territory occupied by Israel. This,

however, was apparently not enough to satisfy the Saudis, who subsequently
informed the Japanese government that it must break off diplomatic relations
with Israel, and all economic ties as well, if it wished to acquire ‘most-favoured’
status for oil supplies. The Saudis also calculated that the Japanese, if they
grew desperate at the prospect of an oil shortage, would importune the United
States to diminish its support for Israel.
Japan was still in limbo in the third week of November when the OAPEC

ministers assembled in Vienna for another meeting. By this time their
governments had had time to digest the EEC declaration of 6 November,
which they evidently found to their taste. For after the meeting on 18
November OAPEC announced that the additional 5 per cent cut in production
due in December would not affect supplies to the EEC countries (the Nether­
lands, of course, apart) but would be deferred until January. The exemption, it

was explained, was ‘in appreciation of the political stand taken by the Common
Market countries regarding the Middle East crisis’. The governments of
Europe sighed with relief and turned to other preoccupations. They would
have been wiser to have kept their eyes fixed on Vienna, where on 19-20
November OPEC held its regular semi-annual conference. On this occasion,
as on others, the most strident voice to be heard was that of Jamshid Amuzegar,
t e Persian minister of finance. Conscious of his fiscal responsibilities, he

assailed the oil companies for their miserliness, angrily complaining that since
t e beginning of October they had not come forward with any new proposals to
ensure the onward and upward march of posted prices. ‘We asked them for