World Policy

With a minimum of fanfare, U.S. and British oil experts sat down in Washington three weeks ago to formulate a joint worldwide policy on oil. Last week, after a minimum of dissension, they quietly initialed an agreement, passed it along to their Governments for final approval.

This lack of fuss was in inverse proportion to the significance of the agreement. Under it, the two nations, which control some 90% of the world's oil, laid down the broad policy which they hope to follow to: 1) stabilize oil markets in the postwar world; 2) provide for the orderly development, mainly by U.S. and British companies, of Middle East oil properties.

The agreement placed a flat ban on "collusive cartel" deals. This was an important concession from the British, whose policy in the Middle East restricted production on several important concessions and tied up markets in western Europe and India in prewar days.

The experts also agreed to develop oil resources with "due regard" to the economic welfare of the producing countries. This simply meant that, in the setting of world quotas, backward nations whose chief revenue is derived from oil would be guaranteed shares large enough to keep their economies healthy.

The third major point of the agreement was a proposal to establish an international oil committee which would direct world production, distribution, development. But it would have no authority over any nation's production for domestic use, could only advise in international disputes. Significantly, the U.S. and British experts agreed that the committee's big problem in the postwar world will be not scarcity but surplus.

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