Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-07-28
|Suez.Step Seen
Having Broad
implications

NEW YORK, July 70 Ro.-
Egypt's naturalization of the
Suez Canal jolted the oil indus
try around the world and Topped
millions of dollars OF the prices
of shares of companies depend
ent on the waterway.
Oil executives and others close
to the situation expressed the
opinion that the long-range re-
suits of President Canal Abdel
Nasser's decision might radically
change the political and eco
nomic pictures in the Middle
East.
There was widespread concern
that the Egyptians will not be
equal to the task of maintain
ing the canal efficiently. Any
inability to carry out already
developed plans to expand and
deepen the canal could worsen
the situation in years to come.
Picture Could Change
The political picture in the
Middle East could be altered if
interference or breakdown in the
flow of oil should affect or
threaten to affect the incomes OF
the oil-producing nations Of the
area. Their economies now de-
pend upon the uninterrupted flow
Of that oil. Resentment against
Col. Nasser might seriously af-
feet his bid to be regarded as the
leader Of the Arab world.
The NaSSer situation may slim
ulate a program to build more
pipelines through the Arab coun-
tries to the East, emptying into
Mediterranean ports. Pipelines
now carry a third of the Middle
East's total oil production.
/ Egypt needs outside help to
improve her economy and likely
will need outside help also if she
hopes to run the canal efficiently,
but Col. Nasser's actions on max
ing it more and more difficult to
extend aid. Thus Col. NaSser's
own position as the ruler of
Egypt eventually may be dam
aged.
Threat Over West
With Col. NasSer assuming
complete control over the canal,
Egypt holds a threat over the
Western world if it should at
tempt to interfere with any move
against Israel.
Almost 16 million tons of ships
went through the Suez Canal in
1855. and II per cent increase
over 1954-ref1ecting industrial
growth in Europe and a chang
ing economic pattern in the
Middle East. The trend to larger
tankers has been pronounced.
prompting plans to widen and
deepen the canal.
OF the nearly ITO million tons
of cargo through the canal in
1855, about 20 million repre-
scented oil. Britain, France, the
United States. Italy and the
Netherlands we're the principal
destinations Of this oil.
Shortage of Personnel
Even under the administration
iof WeSterners, the canal opera
ton was facing a desperate Short
age of such trained personnel as
pilots. Egypt had hampered the
importation Of foreign pilots and
the training of Egyptian ones.
This shortage had meant delays
and financial losses to the users
of the canal, New York oil man
said
. If Col. Nasser is to accomplish
what he announced he would do |
the Aswan Dam with
canal receipts = he probably
would have to double the tolls.
This would bring the cost of
transporting one barrel of oil
through the canal from IL cents
to "a cents. with a resultant eff
feet on the world price. Prices
of other commodities would be
similarly affected.
United States companies now
have a dominating financial in
terest in Middle East oil pro-
duction. The major producing
concern in Saudi Arabia is
made up of four American COM
panies: Standard of California,
Standard Of New Jersey, the
Texas Co. and the Socony
Mobiloil Co.
Own 23.75 Per Cent of Firm
American companies own 23.75I
per cent Of the British Iraqi
Petroleum Co.
Other companies involved in
Middle East production include
Phillips Petroleum, Cities Serv-
ice, Gulf Oil, Richfield Oil, plus
Royal Dutch Shell, Compagnie
Franchise DIES PetroleS and a
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