CAB148-30-Defence and Oversea Policy Committee Meetings Relating to 1967 Disturbances-1967 — Page 246

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(b) The possibility might be examined of letting it be know in the Arab

countries that the British oil companies were exploring the feasibility of

a pipeline to bypass the Canal, and of building larger oil tankers for the

route round the Cape. This possibility might usefully be explored with our

Ambassadors in Arab countries; though it was possible that to make such a

move would alienate the more moderate Arab countries without increasing pressure

on the UAR. We could not expect by these means to exert any pressure on

Israel, since her interest was not in controlling the Canal but in using her

position on the East Bank to force a negotiated end to the Middle East war

and recognition by the Arab countries.

(c) Irrespective of these considerations, there was a case on merits for

examining the feasibility of constructing a pipeline from the Persian Gulf

to the Mediterranean, avoiding Arab countries, which would be likely to remain

extremely unstable for a number of years after the recent conflict, and passing

instead through Turkey, a stable and friendly country.

(a) The heavy losses incurred by the British oil companies as a result of

the Middle East war and its aftermath would seriously damage their capacity

for future development.

(e) The closure of the Suez Canal was increasing the price of Indian food

imports by 17 per cent. There was, however, little prospect of India putting

any effective pressure on the UAR to hasten the reopening of the Canal.

(f) Another Commonwealth sufferer from the closure of the Canal was Malta,

where orders for the dockyard were being adversely affected.

THE PRIME MINISTER, summing up, said the discussion underlined the need

for a study to be carried out of means of reducing our dependence on the

Suez Canal. This and the other studies recommended by the Foreign Secretary

should now be put in hand by the Official Committee on Economic Policy, which

representatives of the Commonwealth Office and Ministry of Defence should

attend for this purpose.

The Committee

Invited the First Secretary of State to arrange for studies of the

implications of the closure of the Canal to be carried out by officials on the basis indicated in the Prime Minister's summing up of their discussion.

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