Saudis reconsider threat of oil cutbacks

With one eye on the American presidential election campaign, Saudi officials are having second thoughts about seriously reducing the kingdom's level of oil production.

"The Saudis are a shrewd people. They understand that hiking the oil price and forcing gas lines in the United States will weaken [President] Carter's position in the election campaign," a US official in this Arabian capital city said.

He added that "ultimately, Saudi Arabia prefers Carter to [Senator] Kennedy in the White House."

Earlier, senior US and Saudi sources had indicated that this country, the largest US oil supplier, would cut back production if the Israeli-Egyptian talks on Palestinian autonomy failed to make real progress by the present May deadline.

Saudi ruling circles still feel there is an urgent need for a swift solution to the Palestinian problem. They would like to see a bold US initiative. But Saudi officials admit privately that they have no love for Sen. Edward M. Kennedy, who is seen here as a pro-Israeli diehard.

"Frankly speaking, I do not think that Carter has anything to worry about until November," a ranking Saudi official told the Monitor Feb. 10.

However, this official did point out that a final decision on linkage between Saudi Arabia's level of oil production and the Palestinian issue has not yet been taken. Such a decision will depend not only on the effect it might have on the United States but also on "our fiscal and economic policies and external factors such as the pressures applied on Saudi Arabia by other Arab states."

Many Saudis feel that "time is running out." They realize that there is little chance for a far-reaching US initiative in the Middle East until after the next Israeli elections, no later than May, 1981. "But we are tired of constantly being put off," one Saudi official said. He added that "we have been hearing this since 1948."

Last week, US and Saudi officials had indicated that they considered the May 1980 deadline for the conclusion o the Egyptian-Israeli negotiations on autonomy for Palestinians in the West Bank and Gaza Strip as the "cutoff line" also for the Saudi decision on any cut in oil production. Saudi officials now, however, are signaling that they might postpone that "cutoff line" until after the US presidential elections.

"A lot will depend on how radical Arabs like the Syrians, the Iraqis, and the Palestinians react in May," one US official says.

Saudi and US officials believe that National Security Adviser Zbigniew Brzezinski's discussions with Crown Prince Fahd and foreign Minister Prince Saud al-Faisal Feb. 4 and 5 in Riyadh contributed to an improvement in relations between the two countries. "Listening to Brzezinski, we felt assured," one officials said.

These officials point specifically to the Carter Administration's determined stand to counter any Soviet move in the Gulf region. Moreover, they refer to statements made by Mr. Brzezinski on the Palestinian issue.

Saudi officials remain close-lipped, however, when questioned specifically about what the US national security adviser had to says about a solution of the Middle East conflict. "Brzezinski sees things from a global perspective," one Saudi official says. He added that "Europe and the Soviet Union are important to Brzezinski. He sees the Middle East as a secondary problem in that context."

During the talks, both Crown Prince Fahd and Foreign Minister Prince Saud insisted that the Palestinian issue was the core of the Middle Eastern conflict. One Saudi participant in the conversations is quoted as saying:

"The United States is the key to the door which unlocks the equation for peace and prosperity."

Mr. Brzezinski's response that "you are preaching to the converted" i said to have pleased the Saudi officials.

Disagreement remained, however, on "what it would take to bring about peace." Informed sources in the Saudi capital note that Mr. Brzezinski made no statement on the Palestine Liberation Organization (PLO), but pointed out that "we talk every day to members of the PLO."

Nevertheless, Saudi officials wish to see statements by the Carter administration "endorsed by acts." They suggest that a renewed attempt -- similar to the one in the summer of 1977 -- to guarantee self-determination to the Palestinians in return for a conditional recognition of UN Security Council Resolution 242 by the PLO would serve as an indication of the administration's understanding of Saudi and Arab concerns.

Moreover, they believe that such an endorsement also could be in the form of "selective arms sales to the countries concerned."