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United States Department of State / Foreign relations of the United States diplomatic papers, 1944. The Near East, South Asia, and Africa, the Far East
(1944)

The Near East, South Asia, and Africa,   pp. 1-43 PDF (15.0 MB)


Page 30


FOREIGN RELATIONS, 1944, VOLUME V
production to supply the expanding net import requirements of
Europe, Africa and such parts of Asia as are not more economically
supplied from the East Indies. This in turn will conserve Western
Hemisphere oil reserves for Western Hemisphere peace-time uses and
as a security reserve in the event of War. Moreover, such development
will create a potential outside source of supply for the United States
in the event that the recent unfavorable curve of domestic discoveries
should not take a turn for the better.
  In so far as such development is delayed by existing conflicts of
short-run interest between the United States and the United Kingdom,
and is impeded by existing political and contractual restrictions33
upon United States companies having concession rights and proprie-
tary interests in the Middle East, a close understanding with the
British is most desirable in order to effectuate the basic United States
policy.
  American participation in the development of Middle Eastern petro-
leum is equitable because American interests hold a large percentage
of proven reserves in that area and participate only to a minor extent
in current production. Such participation is desirable because there
will then be greater assurance that the tempo of exploitation will be
adequate in relation to the desired conservation of Western Hemi-
sphere oil reserves. Furthermore, and of greater importance, United
States policy should, in general, aim to assure to this country, in the
interest of security, a substantial and geographically diversified hold-
ing of foreign petroleum resources in the hands of United States na-
tionals. This would involve the preservation of the absolute position
presently obtaining, and therefore vigilant protection of existing
concessions in United States hands coupled with insistence upon the
Open Door principle of equal opportunity for United States companies
in new areas.
  The United States petroleum policy in the Middle East, then, must
be predicated upon these two overall objectives: (a) full develop-
ment of Middle Eastern Petroleum production, and (b) the stabili-
zation and safeguarding of American concession rights. The more
specific policy objectives are as follows:
"With regard to political restrictions, see correspondence on the inquiry
by
the United States regarding British policy respecting the holding and operation
by foreigners of petroleum concessions in territories such as Bahrein, and
on
efforts by the United States in support of American interests seeking an
oil
concession from the Sheikh of Kuwait, Foreign Relations, 1929, vol. m, pp.
80
ff., and ibid., 1932, vol. ii, pp. 1 if.
The contractual restrictions were embodied In the Group (Red Line) Agree-
ment between private American and European oil interests on July 31, 1928.
The text is printed in Current Antitrust Problems: Hearings before the Anti-
trust Subcommittee of the House Committee on the Judiciary, 84th Cong., 1st
sess., pt. 2, pp. 1004 if.; for further information on the agreement and
the events
leading to the agreement, see Foreign Relations, 1943, vol. iv, p. 944, footnote
42.
30


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