Zahedi: The oil problem -- there is one. I want to do what I can. Jamieson had a good talk and lunch with the Shah. A minor problem is participation with Saudi Arabia. 60/40 and what they pay for participation. It should be at 93% of the posted price -- $10 something. Some countries want to do away with the posted price. We get $7 for our particular oil and Saudi Arabia and others get $10.
Kissinger: The basic point is that these prices are complicated. The Shah's view is he gets 15% less on buy-back oil than the Saudis. Iran is tied to the price of oil, but Saudi Arabia can maneuver around and vary the participation.
Zahedi: I will work on it and we want to help and we understand the problem.
President: Please express to the Shah my deep appreciation for this attitude.
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SECRET/SENSITIVE
