Extent of Arabian oil deal known only to White House (3-16-44)

The Pittsburgh Press (March 16, 1944)

Extent of Arabian oil deal known only to White House

Cabinet members are just now learning proposal involves more than pipeline
By Henry J. Taylor, Scripps-Howard staff writer

New York –
In preparing to press President Roosevelt for information, members of the new Senate committee investigating oil matters say that vital facts about the Anglo-American post-war project in the Middle East are largely unknown outside the White House. Only now, and chiefly as a result of public revelations, they say, are Cabinet members being brought up to date on decisions reached abroad.

The dimensions of the proposition seem to expand all the time. For it develops that apparently much more is involved than a pipeline, costing $100-odd million, across neutral Saudi Arabia. It involves governmental relationships with a dozen or so Arab sheiks, several British protectorates, a sultanate, two British-mandated territories and five rival countries in the Middle East.

The United States undertakes to “construct and maintain” the pipelines, but the undertaking clearly does not acquire, or make accessible for Americans, rights or leases. It does not pertain to America’s oil reserves for the future. The Senators are prepared to challenge President Roosevelt’s recent statements to that effect.

Three lines, not one

There are three projected pipelines, not one. The first would run from the Iranian oil fields to Iran’s port of Abadan at the head of the Persian Gulf. Although this particular line may cost $50 million, say the Senators, its whole existence in the White House project has been largely overlooked.

Line No. 2 would run from Abadan across Iraq, Saudi Arabia, Transjordan, Palestine and Egypt. Line No. 3 would parallel the present pipeline from Kirkuk in eastern Iraq to the Mediterranean port of Haifa, Palestine. Two and possibly three refineries would be built.

As for the financing, the Senators say the entire project may be supplied under Lend-Lease, or at least would involve a loan to Britain to facilitate her own part, including her ownership in the refineries and pipelines.

Cartel is involved

As to export markets, the proposal apparently involves the formation of what would amount to a cartel between the U.S. government, Great Britain and the USSR. The understanding would provide that none of this oil be shipped to the United States. It would be used exclusively for a European price-and-territory government partnership in Europe’s post-war oil – an Anglo-American-Russian cartel. There is little doubt that some members of the Senate committee will insist that the project should be stopped on that point alone.

South Americans fear the Middle East plan would shut off their important oil exports to Europe. As a showcase for America’s global behavior, members of the Senate committee fear the venture might prove a hard blow to American goodwill around the Caribbean, from where it is obvious much of America’s oil for any future war must come.