Gulf of Mexico oil spill: Foreign Office fears BP spill may hit US relations

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The scale and ferocity of the US attacks are said to have disturbed David Cameron, according to Whitehall sources.

Some American politicians have suggested that BP should be barred from future government contracts. The company is the biggest supplier of oil and gas to the US military with contracts worth $2 billion (£1.4billion) a year. Such a move would be likely to benefit US rivals such as ExxonMobil and Chevron.

American midterm elections only five months away, Whitehall officials are understood to be concerned that the issue is becoming a political football in the States.

Tony Hayward, BP’s chief executive, was called “the most hated and clueless man in America” by the New York Daily News. Protesters, angered at BP’s failure to stem the flow of oil, have been photographed stamping on the Union Flag. Support for BP from rival oil groups is also weakening as the industry faces the prospect of a halt to the expansion of offshore drilling.

There are also fears that there are wider implications for British business interests in the US. One Whitehall insider remarked last night: “It’s not doing us any good.” Downing Street has declined to comment on whether the issue has been raised between Mr Cameron and President Barack Obama, but The Daily Telegraph understands that the disaster has come up in discussions between William Hague, the Foreign Secretary, and his US counterpart, Hillary Clinton.

Vince Cable, the Business Secretary, warned that the crisis was having “major indirect effects” on the British economy, hurting the value of pension funds because of the toll it has taken on FTSE shares.

Mr Obama has voiced his personal indignation at BP’s failure to stop the flow of oil more quickly.

Interviewed on the BBC’s Andrew Marr Show on Sunday morning, Mr Hayward said the company had made an “absolute commitment” to clean up the oil and restore the Gulf coast.

He insisted that he had no plans to step down and said that despite seeing billions wiped off its stock market value, BP remained resilient.

Referring to the attacks against him, Mr Hayward said: “I think it is understandable when something of this scale occurs... that people are frustrated and emotional.”

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/7807499/Gulf-of-Mexico-oil-spill-Foreign-Office-fears-BP-spill-may-hit-US-relations.html