Evening star., 1947-10-05

East might quickly upset the entire
today that the parent companies
have recently agreed to sale of an
interest in the operating subsidiary,
Arabian-American Oil Co., to Stand
ard Oil of New Jersey and Socony
Vacuum.
Russo.Iranian Tension
Except for an Iranian concession
obtained in 1916 and abandoned in
1921, active Russian interest in
Middle East oil did not materialize
until the close of World War II. At
that time, the Iranian government
agreed with the Russian government
to formation of a Soviet-Iranian oil
company for development of areas in
Northern Iran. Iranian political de-
velopments blocked ratification Of
this agreement, however, and the
present Russo-Iranian tension stems
from this circumstance.
Clear indication of the American
attitude toward implementation of
the unratified Russo -Iranian agree
ment was given within the past few
weeks by United States Ambassador
to Iran George V. Allen in a pro-
nomcement in Teheran that Iran
should say for itself how and by
whom its oil resources are to be
developed
While thus far only the Russians
are being blocked in their Middle
East oil aspirations by local polit-
ical considerations, there have been
both spoken and implied suggestions
by Arab national leaders in recent
weeks that the course of the Paies-
tine controversy and to a lesser
extent the British-American posi-
ton on the 1896 Anglo-Egyptian
treaty dispute may lead to an "eco-
nomic and cultural" rupture which
would invalidate or at least inter-
fere with operations of the oil con-
cessions.
Pressure on u. S. Firms
Whether such threats are potent
or have been voiced principally for
Middle East political consumption
is not certain at this time. Since
American oil concessionaires repre-
sent private enterprise rather than
United States Government agencies
there Is some lack of logic in blam-
ing the concession holders for our
Governments foreign policy. 1t Is
known that this distinction has been
acknowledged by King Ibn Saud of
Saudi Arabia in informal conversa-
tions with the Arabian American
Oil Co. and company officials ex-
press themselves as not being fearful
of any disruption in their present
with the Saudi govern
ment.
Even so, there could be disruptivs
effects on the whole complex ma
chinery of transporting refining and
marketing the petroleum production
of the Middle East countries.
There are other ways, too, in
which an antagonistic Arab world
could upset both American and
British international economics.
Among these could be boycotts of
United States and British goods,
new restrictions on foreign business
in Arab countries, re-
strictions on the many American
educational institutions now func-
tioning in the Middle East, denial
Of visitors visas or residence per-
pitts and cancellation of interna-
honal air rights.
In speculating on the possibility
Of any or all of these drastic steps
It can be borne in mind, of course,
that they imply obvious advantages
TO the Arab countries as we'll as to
Us. II can safely be believed, also,
that the Arab governments are
much more inclined toward mainte-
nance of friendly relations with us
han the possible alternative of in
creased Soviet influence in that
area.
Investments Are Increasing
Meanwhile, to revert to oil, the
pace of Anglo-American investment.
Development and production in the
Middle East continues with increas-
ng swiftness.
Iranian production is approaching
100000 barrels daily. still the largest,
out some so wells in Saudi Arabia
already have passed the mark of
100000 barrels per day and two
proven fields are not yet in produc-
ion. Iraq production passed 100000
barrels daily, while Kuwait reports
10000 daily and Bahrein about 20
700. Nearly 30 per cent of the 49,
700 square mile concession in Saudi
Arabia is as yet untested and con-
siderable acreage in Iran is likewise
lnproven. Exploratory operations
ire now going on in Northern Egypt
md on the island of Cyprus and
are under way for what
L