The Ottawa Journal from Ottawa, Ontario, Canada • Page 54

54 Wednesday, April 10, 1974 The Ottowa. Journal U.S. plans own WASHINGTON (CP) -The United. States, long an ad-. vocata' of a 'let's stick for tbe oil- consuming countries! is making its own deal with Saudi Arabia, tbe warld's largest single exporter.

While no concrete agree-. meats have been hammered pot, tbe Saudi-American negotiations come amid reports unity among OH- producing countries may be showing signs of crumbling. Should Saudi-American negotiations progress along lines favored by King Faisal's government, it may also shake whatever have been reached among Oil-consuming countries at last month's U.S.-sponsored energy conference here. (Strengthening of the U.S.Saudi alliance appears to be reflected in the recent decision to expand joint economic and, technical co-operation, coincident with, a stepping-up of U.S. arms deliveries to the Saudis.1; Behind these developments may be a feeling in Saudi Arabia that Some marketing security may be necessary to ensure that Saudi Arabia doesn't suffer from the possible drastic curtailment of the available world Oil markets because of high current prices and the possible aha-keout in world economies.

There have been predictions that the high oil price may force some consuming countries to reduce their imports drastically even if this leads to decreased industrial activity and lower living standards and earnings. As the world's major oil ex-. porter, such a situation would have a. major impact on Saudi 'Arabia's current high income. Greater co-operation be-' tween Saudi Arabia and the VS.

would not only provide a huge steady market for Saudi oil but perhaps more impor- tant a relatively saftf haven for Saudi Arabia's financial investments and possibly in-: creased political influence in Washington. From me' US. viewpoint, greater co-operation may pro-, vide incentives Jo the Saudis to maintain and possibly expand their enormous petroleum production. Luring part of the mounting foreign cur-' rency reserves held by the Saudis into the U.S. through investment and sale of U.S.

goods, services and weapons would also help the American economy which is still the. backbone of prosperity in the i. western world. Getting the Saudis to funnel these funds into international aid programs and long-term fixed-investment programs is regarded as probably the most vital goal of any new U.S.-Saudi accord. CHESS By D.

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