Nixon plans co-operation over oil

Press, Volume CXIV, Issue 33425, 5 January 1974, Page 1

Nixon plans co-operation over oil

(N.Z.P. A. -Reuter— Copyright) SAN CLEMENTE, January 4. President Nixon is planning a campaign to convince industrialised nations and Arab oil-producers that they must co-operate to solve the international fuel shortage—or risk a worldwide economic slump.

Mr Nixon’s campaign, outlined today by the United States Secretary of State (Dr Henry Kissinger), has two purposes.

First, to persuade the industrial countries of Western Europe and Japan that they face economic disaster if they try to go it alone in the oil crisis. Second, to convince the Arab oil-producers that they, too, will suffer economically unless they keep oil prices down and strive to. increase production to meet world needs. Mr Nixon visualises an international energy action group, of maybe 20 countries, including the main consumer and producer nations, to work together to solve the oil crisis.

The idea of such a group was originally proposed by Dr Kissinger in a speech in London last month, and Mr Nixon will seek to promote it in a series of consultations with other governments starting next week. Dr Kissinger said after conferring with the President yesterday that the oil crisis was “the example par excellence of how interdependent the world has become, how impossible purely selfish policies are, and how suicidal it is for everybody to pursue totally independent courses.” The United States believed it would be disastrous for the main consumer countries to engage in unrestrained competition among themselves for Arab oil, Dr Kissinger said. He said there were three related problems — the Arabs’ use of oil as a political weapon, and the questions of price and supply. Dr Kissinger said the Arab oil boycott against the

United States in protest against American support for Israel during the recent Middle East war was increasingly inappropriate in view of American efforts to bring about a permanent peace settlement in the Middle East. He said that, if the price of Arab oil kept rising or if the Arabs failed to expand production, there would be a profound effect on the world’s economy, and the Arabs would suffer, too. According to Dr Kissinger, the Arabs are among those who have reacted most positively to the idea of cooperation with consumer Countries. He said the producers “seem to feel the need for stabilising what could otherwise turn into* an extremely competitive, disruptive situation.” It was possible to see how producer nations could enrich themselves by unrestrained use of their temporarily strong bargaining position, Dr Kissinger said. But in the end this could lead to disaster for everybody. “It is peculiarly a case where the common interest is also everybody’s selfish interest,” he said.