Haifa Oil Blockade

Press, Volume LXXXV, Issue 25902, 7 September 1949, Page 4

Haifa Oil Blockade

An official Iraqi communique, a few days ago, reported that the Prime Minister, General Nuri-es-Said, during his visit to London, had negotiated agreements “in prin-

“ ciple ” for loans from three sources —the British financial market, the International Bank, and the Iraq Petroleum Company—to the relatively modest total of £10,500,000. The story behind this report is one of self-imposed stringency. Iraq is boycotting the Haifa oil refinery, but cannot damage Israel without suffering too. At the same time, of course, the sterling area as a whole is penalised. Its shortage of refining capacity is so much the greater without the Haifa refineries, which were closed at the end of the British mandate in Palestine. Supplies of crude oil, both by pipeline from Iraq and by sea, were stopped. Except for a short time in July, 1948, the refineries have been idle ever since. Iraq has held the pipe-line closed; and Egypt has let no tankers for Haifa through the Suez Canal. The Arabs want Haifa to be internationalised; they want also to share in the control of the refineries. The boycott and blockade may be said to put power behind these claims. But they persist now, probably, less because the Arabs expect to succeed than because nobody on the Arab side dares to back down. Iraqi and

Egyptian political leaders are all very conscious of the political risks they take if they appear to capitulate to Israel; they have themselves encouraged popular opinion to believe that on this issue they can hold out and win. Israel, however, has not submitted helplessly to Arab policy. Recently the Israeli Government notified the owners of the Haifa refinery (the Anglo-Iranian and Shell oil companies) that the plant must be worked at once, or Israel would take it over and run it until the owners were willing to run it. In the short run, Israel could make good this threat only if able to obtain Rumanian or Russian oil; in the long run, it might be made effective in a very different way. x4.merican interests are said to have studied and favoured the project of a pipe-line from the Gulf of Aqaba to Haifa, by-passing both the Suez Canal and the pipeline from Iraq. Russia, perhaps, would for political reasons be readier to find a little oil for Israel than the United States Government would be to allow American oil interests to overplay their hand in the Middle East to Britain’s grave disadvantage; but it is too soon to exclude either possibility, or the diplomatic brandishing of either. The Iraq Government, some observers believe, hopes that the refineries will be started with oil brought by tanker; it would then have the occasion it wants to justify itself before the public for sending oil by the pipe-line. In that event the Egyptians would have an equally good occasion to reopen the Suez Canal to Haifa tankers. But if the Iraq and Egyptian Governments are secretly praying that Israel may release them from their own senseless policy by drawing a few cargoes of Russian oil to Haifa, it ought not to be beyond AngloAmerican powers of persuasion to convince them that the initiative had much better be a collective Arab initiative, as it can be. The Saudi Arabian Government, which, as “The Times” said a week ago, “ cannot be accused of any undue “ sympathy for Israel ”, is willing to send oil to Haifa if tankers can get there. Anglo-Egyptian relations have in the last year or so greatly improved. They may fairly be said to be tested by the present need to concert Arab leadership in breaking the deadlock. The small scale of Iraq’s borrowing plans suggests, perhaps, that the emergency is now expected to be brief.