The Oil Flows

Out to the Sun Oil Co.'s 30,000-ton supertanker Eastern Sun off the coast of South Africa crackled a radio message from home: instead of heading for company docks at Marcus Hook, Pa., unload cargo of 220,000 bbls. of crude oil in "the United Kingdom area." The same oil-to-Europe word was flashed out to dozens of other tankers all over the Atlantic and Indian Oceans last week. In Washington the U.S. moved to ease Western Europe's oil shortage brought about by the blocking of the Suez Canal.

The oil-relief plan had been prepared well in advance of its announcement. Representatives of 15 U.S. oil companies, who had formed the Middle East Emergency Committee, immediately began coordinating tanker movements and planning a big increase in Western Hemisphere crude-oil production. The objective: to ship an extra 675,000 bbls. of oil a day to hard-up Western Europe. With federal antitrust restrictions waived in effect for the crisis, oilmen set their sights on readjusting world oil routes to make up between 75% and 80% of Western Europe's daily needs of 2,200,000 bbls.

Beyond the Western Hemisphere's contribution, the Europeans can still count on --for the moment, at least--some 325,000 bbls. a day pumped by tapline through Saudi Arabia to the Mediterranean. And they will still get some 800,000 bbls. a day around the Cape of Good Hope--including perhaps as much as 350,000 bbls. normally bound from the Middle East to the U.S. East Coast (a deficit that the U.S. will make up in routing more oil from the Gulf Coast to the Atlantic seaboard).

With the emergency plan now under way, the major long-term oil problems are: 1) the world shortage of tankers and 2) Europe's shortage of dollars to pay for the Western Hemisphere oil. The U.S.'s Office of Defense Mobilization is at work readying 18 maritime tankers, eight T-2 tankers and 13 navy oilers, and shipyards are booming with orders for new supertankers. For the present, defense mobilizers say that Europe will have to pay dollars for the oil, but for the long pull ways could be found to advance financial aid so that Europe's industry can keep rolling and the NATO area remain viable. Most hopeful prospect: the Administration is planning to channel most Western Hemisphere oil through the 17-nation Organization for European Economic Cooperation. Thus, while handling the short-term emergency, the U.S. is helping to advance the long-term concept of an economically integrated Western Europe.

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