Permanent Under Secretary’s Planning Committee, ‘Country assessment sheets’, 8 November 1974

“Country assessment sheet: Iran”

“Iran is basically pro-Western and is rapidly approaching major economic and political status in the world”. Iran provided 19% of UK oil supplies in 1973. “In addition British oil companies earn substantial amounts of foreign exchange from oil obtained from Iran. BP have an arrangement whereby they can pick up 20% of Consortium oil, currently one million barrels a day”. Iran is “the strongest in military terms” of the countries in the area, “the combination of her economic and military strength make her probably the most important power in the area. Iran should provide a stabilising influence in the region, particularly in the Persian Gulf and the northern Indian Ocean; she is also assuming an extra-regional world role”. Iran is also “a large expanding market for British goods and services, including military equipment, and opportunities for British investment…. The major threat lies in further increases in the price of oil… A further threat would be the removal of the Shah by assassination, illness or a coup d’etat. His health is however good and he is well in control of the internal situation”.

The paper lists four “major objectives of the Mission’s [ie, embassy’s] work. 1…. to ensure the flow of oil on reasonable terms; to ensure our share of the expanding Iranian market. 2. to secure and maintain the understanding and support of Iran, as a major non-Communist power in the area, in the execution of British policies in the Persian Gulf, in the Middle East and in the Indian ocean and adjacent areas. 3. to retain the use, if required, of the Iranian section of the CENTO overflying route. 4. in furtherance of all these aims to maintain a personal dialogue with the Shah”.

“Country assessment sheet: Kuwait”

“Kuwait’s holdings in Britain represent about 10% of all official sterling balances eligible under the 1974 Guarantee”. Total reserves estimated at $5000 million. “Kuwait has hitherto been careful to avoid disrupting world financial markets. Now that Kuwait’s surplus revenues are much large than before (estimated at $6,000 million extra for 1974/75) we need to encourage this policy and to cooperate in recycling these sums to the economies of the oil importers. We should try to encourage further Kuwaiti investment in the United Kingdom in appropriate sectors (and at appropriate levels) and the channeling of surplus funds through the United Kingdom”. Kuwait has one seventh of world’s proven oil reserves and BP has a 20% shareholding in the major producing company, KOC. In 1973 Kuwait supplied the UK with 20% of her crude oil imports. “It is important for the UK to maintain access to this oil and to try to persuade Kuwait… to adopt a line on oil pricing and production as favourable as possible to our interests… Although our defence commitment to Kuwait ended in 1971 her continuing independence under the Sabah regime remains important for British interests. A left-wing coup d’etat or an Iraqi invasion could lead to Iranian military intervention and might stop for a time the flow of oil from the Northern Gulf (Kuwait, Iraq and Iran) and bring to power as government less disposed to cooperate with the West in economic matters”. One threat listed was of a coup. “This threat remains endemic in a country under Shaikhly rule and with a native population outnumbered by non-Kuwaitis who are treated as second-class citizens”. UK currently exports to Kuwait military goods worth £670m.

“Country Assessment Sheet: Nepal”

“The main specific British interest is the Gurkha connection which may be reduced as a result of the Defence review. We also have a general but related interest in fostering Nepalese independence and in helping to promote internal stability”.

National Archives: FCO 49/502

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