Documents Reveal U.S.-Saudi Oil Intrigue

The United States and Saudi Arabia, who have long rejected the widespread belief that they work together to influence the world oil market, have in fact cooperated extensively on oil issues for many years, State Department documents and government legal papers confirm.

During the Reagan and Bush Administrations, the documents show, the Saudis have sometimes informed the United States in advance of key moves they planned to make at meetings of the Organization of Petroleum Exporting Countries and have consulted U.S. officials about marketing initiatives.

U.S. officials have often discussed the price of oil with the Saudis and other friendly producers, the documents reveal, not asking for any particular price but emphasizing the negative consequences if prices were to move outside a certain range.

This appears to contradict repeated assertions by the Reagan and Bush Administrations that they never express views about the price of oil because they believe it should be determined solely by market forces.

The papers make clear, for instance, that when prices were above $30 a barrel in 1984, the United States leaned on the Saudis to bring them down. When they bottomed out at almost $10 two years later, the Reagan Administration conveyed to Riyadh its concern about the threat posed by the price crash to U.S. banks involved in oil projects.

The internal State Department documents, made public in a Freedom of Information Act proceeding, deal with contacts that took place in the mid-1980s. But legal papers filed on behalf of the State Department last month in U.S. District Court here indicate that the policy is still in place.