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Approved For Release 2OQ 205i L4 : 
"GHRBRERBEOSoROND 10002008 -1 
WASHINGTON, 0. €. 20301 
October 24, 1973 
MEMORANDUM FOR Secretary James R. Schlesinger 
. Secretary William P. Clements, Jr. 
SUBJECT: 
Effect of Arab cutbacks and embargoes 
Saudi Arabia, Algeria, Libya, Abu Dhabi, Bahrain, Qatar, Kuwait, 
and Dubai 
have embargoed oil sales to the U.S. as well as to areas that use crude for 
delivery to the U.S. (offshore refineries). 
They have also ordered additional 
production cutbacks across the board. 
The net result of these acts is a 
4 million barrel per day reduction (9%) of the free world supply of oil. 
In addition, Kuwait and Algeria have just embargoed the Netherlands, further 
reducing supply by 
.5 MBD, for a total of 4.5 MBD. 
The Persian Gulf producers, meeting in London yesterday, independently ar- 
rived at a shortfall of 4.65 MBD, 
The embargoes are to be strictly enforced, with no substitutions or pro-rating 
for offshore refineries, 
Recognizing "ripple effects", the shortages will be distributed approximately 
as follows: 
. 
Current 
Percent decrease 
Country 
Net loss 
Consumption 
in Consumption 
U.S. A. 
3 MBD° 
17 MBD 
18% 
Europe 
1 MBD 
14 MBD 
7% 
Japan 
5 MBD 
5 MBD 
10% 
The "pipeline" is about three weeks long, i.e., deliveries to consumers will 
be running 18% short by November 15, 
Shortages will be worse unless air quality standards are temporarily relaxed, 
since the curtailed production was low-sulfur crude. 
The Arabs have indicated a willingness to end these cutbacks when Israel 
"returns to its pre-1967 borders", 
not upon a cease-fire, 
Almost unnoticed in this difficulty, most Arab countries have also virtually 
doubled the posted price of that crude which is delivered. 
The results will 
seriously unsettle the consuming nations' balance of payments. 
COMPLETED 
Thomas C, Reed 
Approved For 
P Release 2002/08/17 
6 BIR PALER AUN 
GSONOS. 
Attachment 
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: 
‘Approved For Release 2002/05/17 : CIA-RDP75B00380R000100090069-1 
Sources of U, s. eu in mailiiile of barrels per day 
Crude Oil Imports 
, 
\ 
All Arab countries 
1,06 
6. 1% 
Canada 
96 
5.5 
: 
Nigeria 
ee 
48 
- 
“ee 
: 
a 
Venezuela 
39 
Que 
Indonesia 
. 
225 
1.4 
Iran 
. 
223 
1.3 
All other 
. 
213 
Per 
Totabivr 
3.5 
- 20% 
Product Suporte. 
Caribbean* & Cent, Amer. “421 
7. O% 
Venezuela 
; 
74 
4.) 
Canada 
te S3q 
s 
1.9 
Europe 
»28 
1.6 
All Arab countries 
oe 
EO 
+6 
All other 
he 
OB 
<4 
«5 
Total 
3.0. 17% 
U.S. Crude 
9.6 
56% 
U.S. Gas Liquid Products 
1,7 
10% 
Inventory Buildup 
, 
(65) 
(3)% 
Total U.S. Consumption 
Lied 
© 
+ 200% 
* 
"Offshore" refineries in Trinidad, Netherlands Antilles, Aruba, 
Virgin Islands, Puerto Rico, etc, 
Approved For Release 2002/05/17 : CIA-RDP75B00380R000100090069-1