Arabian American Oil CompanyDenies Overcharging Navy; Senate Committee Asks Inquiry by Justice Dept.

WASHINGTON, April 28 (UP).-The Senate special war investigating committee and a group of interested American oil companies agreed today that the big oil fields of Arabia probably would be useless to the United States in the event of war with the Soviet Union.

But that was about the only thing they agreed on in separate statements on the Arabian oil question.

The committee, which has been investigating the use of Near Eastern oil in World War II, accused the companies of a $38,000,000 overcharge on Arabian oil they sold to the Navy.

The companies, joint owners of the Arabian American Oil Company, promptly denied it. They said they saved the Navy more than $26,500,000 on its World War II oil buying.

Arabian American is owned by the Standard Oil Companies of California and New Jersey, the Texas Oil Company and the Socony Vacuum Oil Company.

The committee charged that the companies demanded $1.05 a barrel for their oil, delivered in the Middle East, at a time when the Navy needed fuel badly because of the war. The same oil had been offered earlier for 40 cents a barrel, the committee said.

Senator Owen Brewster, Republican, of Maine, chairman, told a news conference the committee has recommended a Justice Department inquiry to find out whether the companies are violating the anti-trust laws by their Arabian operation.

The committee report said that in any event the Arabian oil reserves would be of “dubious value” if war broke out.

“Most military opinion agrees on the probability of the destruction or capture of the Arabian oil fields by the enemy in the event of any crisis,” it said.

The word “enemy” was written into the report instead of “Soviet,” which had been carefully inked out.

Arabian American agreed on that point.
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