bottit
TIAL
to FRANCE and Italy:
insufficient subject-matter for
extended dialogue with oil producers which does not touch on
oil prices and volumes; temptation to discuss market management will always be there. Furthermore such talk can lead to unrealistic expectations and actually work against improved producer-consumer relations. Prefer bilateral contacts for improving relations with producers
- If France and Italy persist: could accept passage currently in square brackets in communique so long as the following is
added at the end: "so long as no matters relating to market management of the oil market are discussed"
- to US: IEA action at beginning of Gulf war, involving
mixture of offering extra stocks to market and demand restraint measures, was effective in calming market. All IEA countries except net oil exporters have to hold emergency oil stocks. UK government satisfied that it has adequate control over its stocks (held under EC rules not IEA ones), which are held for it by oil companies. Other countries perhaps need to ensure adequate control over their stocks, but no need to call for increase in overall stockholding
If US persists: could agree to reference to IEA members
increasing stocks or increasing control over them "where appropriate" - ie not appropriate in our case
117sgij
CONFIDENTIAL