Document created: 6 February 03
Air University Review, March-April 1977

The Oil Weapon and American Foreign Policy

Dr. Joseph S. Szyliowicz
Major Bard E. O’Neill

IN EARLY 1975 Secretary of State Henry A. Kissinger began a new round of visits to the Middle East designed to promote a second agreement between the Arab states and Israel. Such an agreement was vital if the momentum toward a settlement of this tragic conflict was to be maintained and a new outbreak of fighting averted. There were numerous indications that this round of negotiations would be far more difficult than the earlier disengagement agreements because statesmen on both sides now had to confront issues that they had heretofore been reluctant to face. The Israelis had to assess the extent to which they were prepared to evacuate strategic positions in the Sinai and in the Golan Heights in return largely for Arab promises. The Arabs for their part had to assess the extent to which they were prepared to provide the kinds of guarantees that at least implied recognition and acceptance of Israel.

Following several months of tough negotiations, a breakthrough finally occurred in September 1975 when Israel and Egypt agreed to another limited pullback of forces in the Sinai. Unfortunately, there has been little movement since that time, owing in part to the crisis in relations between Cairo and Damascus caused by the accord and to the tragic civil war in Lebanon. Although new hopes have been generated by the anticipated return of the parties to the conference table at Geneva in 1977, they are tempered by the sober reality that the most contentious issues separating the two sides, including the future of the Palestinians, must now be addressed. At any point, therefore, it is conceivable that the momentum toward peace may be rudely interrupted by one side or the other and that a new outbreak of fighting may occur. As was the case prior to the October War, the Arabs may come to the conclusion that the political situation has been "frozen," largely because the U.S. has been unable or unwilling to exercise sufficient influence against Israel while the U.S.S.R. has refrained from meeting all of Cairo's demands for military equipment. In the context of rising frustration, hostilities could break out once again, either in the form of a consciously planned and executed Egyptian-Syrian attack, a unilateral assault by Syria, or a pre-emptive strike by Israel against one or both Arab countries.

One of the implicit dangers for the U.S. and its allies in such a situation is the threat of a new oil embargo, for it is virtually certain that the Arab oil-producing states will come under tremendous political and moral pressure from within the Arab world to wield the oil weapon. No doubt anticipating such a development, Arab spokesmen, in a manner reminiscent of their actions in 1973, have been warning the West of the relationship between a secure flow of oil and a settlement of the Arab-Israeli conflict. Though these threats were made in a far more restrained manner than in the past, they could scarcely be ignored, for the decision by the Organization of Arab Petroleum Exporting Countries (OAPEC) in October 1973 to decrease the production of crude oil and to embargo the U.S. and Holland had demonstrated vividly the then new-found solidarity in the Arab world. In the past, most observers, noting the ideological and personal rivalries that divided the Arab states and remembering the futile 1967 embargo attempt, had doubted that OAPEC could mobilize its members into effective collective action. The events of October 1973, which caught the world by surprise, demonstrated once again the dangers of basing contemporary policy on historical trends and experiences, particularly when the conditions of the past are misread. As is now quite evident, a coordinated effort on the part of the Arab states did not require even ideological unity; the shared humiliation resulting from the debacle of 1967 and the consequent need to redeem Arab honor provided a psychological bond that transcended existing divisions between "revolutionaries" and "reactionaries."

As the embargo recedes into history, it too, becomes increasingly subject to misinterprelations and may thus serve as the basis for necessary tension and conflict that would be damaging to many countries. If Arab statesmen believe that their 1973 actions in regard to oil produced major concessions in American policy, the temptation to adopt a similar strategy in the future may well be overwhelming. In view of this situation, a careful and systematic analysis of the impact of the 1973 embargo on American foreign policy in general and toward the Middle East in particular is of more than academic interest. We shall be especially interested in ascertaining whether present conditions are similar to or different from those of October 1973, and, if there is a discernible variation, what implications it may have for the future use of the oil weapon by the Arab oil-producing states.

ARAB PETRO politics in the fall of 1973 involved three separate but related actions: an embargo of the U.S., Holland, South Africa, and Portugal; a cutback in overall oil production; and a quadrupling of the posted price of crude oil. Each of these differed in terms of motives, targets, and effects, and it is therefore imperative to consider them separately.

The quantum escalation in oil prices that followed OAPEC's decision to reduce the flow of oil received the least immediate attention but, as we shall point out later, has had a severe impact. The decision to raise prices was motivated by economic considerations and involved such major non-Arab producers as Iran, Venezuela, Indonesia, and Nigeria, all of which eagerly seized the opportunity to redress what was widely considered to be inequities in the benefits accruing to raw material producers and, hence, in the international distribution of wealth.

While there was not a conscious target against whom this action was directed, the burden (at least in the short run) was borne by the poorest states in the international system. In India, for example, hopes for economic development were at least temporarily dashed as scarce resources had to be diverted to finance higher bills not only for oil but also for such by-products as fertilizer. What this meant for India's people could be seen in the long lines that formed outside the few gas stations in rural areas where peasants clamored for fuel for their irrigation pumps in order to save their crops and avert famine. Violence was not unknown in this desperate context.

The second measure, the production cut backs, was motivated by a mixture of economic and political considerations. Decreasing the supply of oil while demand remained high facilitated actions designed to increase prices. More important, however, were political factors. The cutback had a threefold purpose. First, since Europe and Japan were extremely vulnerable to such action because of their high dependency on oil supplies from the Arab world, OAPEC sought endorsement of Arab political objectives in the conflict with Israel. Maintaining the decrease in production was deemed a necessary fillip to achieve a second political objective, namely, generating European pressures on the U.S. for a change in its policy U.S. decision-makers now had to consider the economic well-being of principal allies when assessing policy toward the Middle East. Third, the cutback facilitated the implementation of the embargo by ensuring that too many oil tankers destined for other countries would not mysteriously appear in U.S. ports.

The cutback in production was ultimately designed to reinforce attempts to bring about a change in U.S. foreign policy through the embargo. As the OAPEC Ministerial Council declared in its statement announcing the reduction in production, such actions would continue "until the Israeli forces are completely evacuated from all the Arab territories occupied in the June 1967 war, and the legitimate rights of the Palestinian people are restored." Later, King Faisal of Saudi Arabia, clearly the most influential Arab leader in terms of oil policy, added that the Arabism of Jerusalem would also have to be affirmed.1 Although Portugal and South Africa were also embargoed, this action, designed to demonstrate solidarity with the African states that had adopted a pro-Arab policy, was of minor significance.

What was the effect of the embargo on U.S. policy toward the Middle East? To answer this question, it is necessary to consider both the pre-embargo objectives and techniques of the U.S. in this region. The Nixon administration officially identified the objectives as follows: (1) settling the Arab-Israeli dispute through a process of negotiations leading to an interim agreement and staged implementation of a settlement of all issues, with the U.S.S.R. expected to playa responsible role; (2) strengthening ties with traditional friends such as Iran, Jordan, and Saudi Arabia, and restoring relations with the Arab states that severed them in 1967; (3) maintaining the How of Persian Gulf oil at reasonable prices and in sufficient quantity to meet the needs of the u.s. and its allies, which necessitated U.S. concern for the stability of the region; and, (4) aiding in development, improving trade, and cooperating with oil-producing areas in the sound investment of their large foreign exchange balances and dissuading the European Economic Community (EEC) from adopting discriminatory relations with the Middle Eastern states, which would result in damage to U.S. trade. 2

When one considers these objectives and examines the evolution of U.S. foreign policy toward the Middle East in the sixties and seventies, it is apparent that American policy makers were concerned with two major issue areas: the Arab-Israeli conflict and the complex of questions connected with oil. Since the principal states involved were clustered in different parts of the Middle East--none of the major oil producers, mainly located around the Persian Gulf, bordered on Israel--the U.S. pursued two independent and separate policies.3 In terms of the Arab-Israeli conflict, the objective was to obtain a settlement between Israel and its neighbors based on a balance of power. In the Persian Gulf region, the U.S. sought to maintain friendly relations with the oil-producing states, especially Saudi Arabia and Iran, and to avoid destabilizing change that might adversely affect U.S. interests there.

To accomplish its objectives in each of these areas, the U.S. used a combination of techniques. In the Arab-Israeli conflict, Washington sought to establish a context suitable for the peaceful resolution of the differences between the two sides through limited and cautious attempts to persuade the Arabs and Israelis to cease military confrontations and begin the process of negotiation, hopefully with the cooperation of the U.S.S.R. The most significant initiative toward this end between 1967 and 1973 was Secretary of State William P. Rogers's plan to bring peace to the area, which led to the cease-fire along the Suez Canal in the summer of 1970, ending the war of attrition. In conjunction with such efforts, the U.S. granted Israel additional military equipment and promised Cairo the prospect of effective negotiations in the future. At no time, however, did Washington seem willing to apply significant pressure on Israel to return substantial portions of the territories occupied in the 1967 war--the Sinai, Gaza Strip, West Bank, and Golan Heights. Rather, the U.S. limited itself to acknowledging that its support of Tel Aviv did not necessarily extend to Israel's territorial acquisitions, while at the same time supplying Israel with sophisticated weapons believed necessary to maintain the balance of power in the area.

Simultaneously, the U.S. strengthened Jordan by means of military and economic assistance because it was perceived as a moderate state opposed to radical Arab elements and amenable to a peace settlement. To underscore its support, the U.S. engaged in a dramatic show of military strength on behalf of King Hussein during the September 1970 battles between the Palestinian guerrillas and Jordanian forces against Syria, should the latter continue to back the armed invasion of Jordan by units of the Palestine Liberation Army based in Syria.

EVENTS IN October 1973 profoundly affected the internal dynamics within the Middle East and America's relations with it. When the fighting had ceased, the situation in the area was quite different from what had existed a few weeks earlier, and changes in U.S. policy must be viewed in terms of the new military situation. Politically, the Arabs achieved great success. They accomplished their objective of breaking the existing stalemate and, in so doing, gained a new sense of confidence concerning the eventual outcome of the struggle with Israel. Conversely, the Israeli feeling of superiority and, indeed, the very axioms of their strategy were shaken if not shattered.

The Arab success was the result, at least to some extent, of their improved military capabilities--an improvement due to their obtaining from the U.S.S.R. the large quantities of modern, sophisticated equipment necessary to fight a "first-class war." The relationship between quality and quantity was highlighted by the early fighting in which Israeli qualitative superiority was offset, to some degree, by Egyptian and Syrian quantitative superiority. Therefore, while Israel retained its military advantage, the margin of that advantage had diminished, and, in the light of the sharp increases in Arab oil revenues, the possibility arose that the Arabs might achieve military parity or perhaps even superiority in the longer-term future by combining qualitative improvement with quantitative dominance. In the October War, however, a U.S.-sponsored cease fire prevented the Israelis from gaining a clear cut military victory over Egypt by isolating the Second Army as well as destroying the already trapped Third Egyptian Army. This, plus U.S. insistence on opening supply lines to the latter army, and the decisions to resupply Israel and to extend it $2.2 billion in emergency aid represented a carefully designed effort to create a situation conducive to a revitalized U.S. peacemaking effort. Soon after, Kissinger made the first of his many trips to the Middle East.

These well-publicized journeys ultimately resulted in disengagement agreements between the combatants on both the Sinai and Golan fronts. While Kissinger was making his strenuous efforts in this regard, the U.S. also had to deal with the embargo that posed a direct challenge to its international position. Because of the serious responsibilities inherent in its role as an alliance leader, the U.S. could ill afford to have its pledges and policies endangered by succumbing to economic pressures. Hence, the U.S. combined veiled threats with promises of aid and assistance. These tactics ultimately proved successful, and in mid-March 1974 came the welcome news that oil shipments would be resumed.

It would be a mistake, however, to assume that this goal was achieved solely as a result of U.S. policy. It was also made possible by decisions taken in Riyadh. To understand them, it is necessary to consider why King Faisal applied the embargo in the first place. Two major factors can be identified. First, he felt that the U.S. simply did not understand his feelings concerning the Arab-Israeli conflict and the decision by the U.S. to support Israel brought his credibility into question since he had been warning Washington of his concern for several months. Second, one must consider the political forces within the Arab world. If he had not acted, his entire regime would have been seriously endangered by a wave of resentment that surely would have followed. As things turned out, his decision to act gave him a new image. With this move, King Faisal was transformed from a "reactionary ally of U.S. imperialism" into a leading Arab nationalist, a development symbolized by his triumphant visits to Egypt, Syria, and Jordan in 1974 and early 1975. Furthermore, the massive influx of oil revenues enabled Faisal to ensconce Saudi Arabia as the major contributor in the replenishment of the armed forces of the confrontation states.

It is instructive to note that at no time during the embargo did King Faisal wish to endanger his relationship with the U.S., for he shared Washington's concern with the need to contain Soviet influence, which he perceived as presenting a threat to the survival of his monarchy. Accordingly, throughout the embargo period, he carefully sought to avoid a sharp confrontation with the U.S. and never allied himself with such radical regimes as Iraq and Libya, which were opposing any settlement that implied recognition of Israel. Thus, it was not surprising that in the midst of Kissinger's shuttle diplomacy Riyadh readily agreed with Cairo that U.S. policy had changed significantly, even though none of Faisal's original three demands (which he subsequently modified) was met. Indeed, the formal OAPEC statement announcing the lifting of the embargo, which the Saudis had been instrumental in drafting, was surprisingly mild and general. It stated:

The ministers re-evaluated the results of the Arab oil measures in light of its main objective, namely to draw the attention of the world to the Arab cause in order to create the suitable climate for the implementation of Security Council Resolution 242 . . . . The ministers took cognizance of ... the signs which began to appear in various American circles calling (in various degrees) for the need of an even-handed policy. . . American official policy. . . assumed a new dimension vis-à-vis the Arab-Israeli conflict.

On the other hand, the announcement indicated that U.S. policy had not yet reached a position "compatible with the principle of what is right and just toward the Arab occupied territories and the legitimate rights of the Palestinian people," so production would not be fully restored to pre-embargo levels, and a review of the situation would be made later.4

Nevertheless, Saudi Arabia did raise its production to former levels, though it continued to warn of the need to achieve a settlement of the Arab-Israeli conflict. Washington welcomed these developments, and a new relationship, the Saudi Arabia was officially confirmed in early April 1974 when both states announced an agreement to strengthen economic, technological, and military cooperation. The agreement included a U.S. commitment to re-equip and train the Saudi National Guard and the creation of mechanisms "to broaden and open the entire United States-Saudi Arabian relationship," but the State Department was at pains to deny that the U.S. was engaging in the kind of bilateral deals for which it had criticized its allies on previous occasions.

Whether or not the agreement represented a volte-face, the U.S. was clearly emphasizing a number of objectives that centered around oil, including increasing U.S. influence in the region, alleviating its balance of payments problem, which had been aggravated by the new oil prices, strengthening the security of the Persian Gulf area, ensuring U.S. access to oil, and encouraging the diversion of Saudi funds into international aid efforts and long-term programs of investment.

Also indicative of the changing U.S. position on Middle East issues was the new relationship with Cairo and Damascus. The U.S. now proffered financial and technological assistance to Syria and Egypt and carefully sought to display its new flexibility by supporting a United Nations vote condemning Israeli reprisals against Lebanon in the spring of 1974. When former President Nixon visited the area several weeks later, he received receptions in Arab capitals that ranged from correctness to exuberance. The commitments arrived at during his trip further symbolized America's new role, as diplomatic relations with Syria were re-established and Nixon emphasized more than previously that the Israelis would have to take risks to achieve a settlement. At the I same time, however, the U.S. replenished Israel’s military arsenal, sending it tanks, aircraft, antitank missiles, and other sophisticated equipment. The resupply of Israel, combined with intensive training and preparations by the Israeli Defense Forces, I was designed to give Israel the capability to fight a two- to three-week war.

In other parts of the Middle East as well, the U.S. sought to create interdependent relationships of varying degrees through the use of diplomatic, economic, and military instruments of statecraft. Diplomatic missions were dispatched to several Persian Gulf sheikdoms, and new military sales were arranged with Jordan, Lebanon, Kuwait, Iran, and Oman. In addition, the U.S. granted the Shah of Iran permission to transfer F-5 aircraft to Jordan. The deals with Amman and Beirut, which for the most part consisted of defensive equipment such as antitank missiles, air defense missiles, and F-5 aircraft, were designed to bolster friendly governments and to dissuade them from turning elsewhere for arms. In the case of Lebanon, there was, in early 1975, a real possibility that either the Soviet Union or Syria would eventually become involved in defensive arrangements. A commitment by Damascus, involving active participation in the defense of southern Lebanon against Israel's anti-Fedayeen operations, would have been most troublesome, given Israel's public position that such a situation would be unacceptable. Although the Lebanese government resisted Syrian involvement, it was under increased pressure to protect its villages in the south. How long it would be before the government yielded to such pressures and invited Syrian help was not certain.5 The U.S. apparently came to the conclusion that the situation was serious and that it could not afford a wait-and-see policy.

The supply of military equipment to friendly Persian Gulf states was designed to help Kuwait, Iran, and Oman (whose long-term interests were similar to those that the U.S. shared with Saudi Arabia) resist revolutionary movements, to minimize Soviet influence in the Gulf and to secure the flow of oil. Iran had not only experienced historical threats from the U.S.S.R. but was also concerned that Baghdad's support for revolutionaries within its own borders, in Pakistani Baluchistan, in Oman, and elsewhere was a strategic undertaking, aided by Moscow, to surround her in a sea of ideological hostility. Kuwait, meanwhile, was confronted by Iraq's demands for part of its territory. Finally, Oman, which is located on the southern side of the vital Strait of Hormuz, had to cope with Marxist-led revolution in Dhofar province, backed by the People's Democratic Republic of Yemen and the U.S.S.R.

While it could be argued that revolutionary successes would not necessarily bring to power regimes that would reduce or terminate oil supplies to selected countries such as the U.S., Washington was not prepared to gamble on this. Kissinger made it quite clear that the U.S. was concerned that a seizure of power by a figure similar to Libya's Mu'hammar al-Qaddafi could have an adverse impact on an already-delicate petroleum situation. 6

Although significant changes clearly occurred in United States policy in the Middle East, a marked degree of continuity could also be discerned. The objectives that had been articulated before the October War remained constant, with the qualifications that (1) a new objective, that of restoring the oil flow, became paramount, and (2) the priority accorded to particular objectives both in the Middle East and in the larger context of American global policy changed dramatically. Unlike the situation prior to the war, Washington now focused primary attention on its objectives in the Middle East.

For the first time in years a settlement of the Arab-Israeli conflict occupied the attention of policy-makers at the highest levels, and its pre-eminence was intensified by the Arab embargo's destruction of the former separation of the Arab-Israeli issue from the oil question. Although such a settlement had represented an important objective in the region for many years, after the failure of the Rogers Plan, the issue had laid dormant because of a general feeling that the existing deadlock could not be broken in the absence of significant structural changes in the region. Those changes were wrought by the events of October 1973.

THE HIGH priority accorded the Middle East question was accompanied by a change in techniques employed there. The former policy of limited and cautious persuasion on the Arab-Israeli issue was replaced by the intensive and highly active "shuttle diplomacy" of Henry Kissinger. To implement his efforts, Kissinger combined rewards and veiled threats of withholding assistance, and U.S. aid was now dispensed far more generously to Egypt and Syria than it had been for many years. Moreover, the U.S. did not hesitate to press home explicitly to the Israelis the point that any settlement necessitated concessions involving risks on their part, risks they should be prepared to take in the interest of peace.

It should be emphasized, however, that the U.S. deliberately pursued a policy designed to demonstrate that it was not reacting to "blackmail." In particular, Washington continued to support Israel, and, as we have stressed, Kissinger, combining threats and rewards in his negotiations with the Arab oil states, did not yield to the original demands formulated by OAPEC and announced by King Faisal.

Yet another change in American foreign policy was the increased attention paid to the security requirements associated with maintaining the flow of oil. There could be little doubt that the Persian Gulf and the Indian Ocean were critical in this regard, and both the Departments of State and Defense supported a Navy proposal to improve facilities on Diego Garcia. There was no gainsaying the fact that the strategic importance of the Persian Gulf was fully accepted by top-level decision-makers, and its security and stability would receive high priority in the future. Indeed, we are willing to hazard a prediction that before long the Arab-Israeli issue will become of secondary importance in the region and the world, and the attention of statesmen will be primarily focused on the Persian Gulf and events therein.

What role, then, did the embargo actually play in bringing about the changes that did occur in U.S. policy--changes of style and methods more than substance? This is a difficult question to answer, for one must separate two events, the October War and the actions of OAPE. In our view, there is little doubt that the October War itself would have sensitized American leaders to the dangers of the status quo and forced a new American effort to resolve the Arab-Israeli issue, which might have succeeded over the longer term. Oil served as a lubricant, however, in increasing the pace and intensifying the effort.

In any case, the U.S. succeeded in achieving its new objective--restoring the flow of oil--and greatly strengthening its position in the area. Relations ranging from formal to cordial were established with previously hostile states such as Syria, Algeria, and Egypt, and ties with friends in the area, notably Saudi Arabia and Iran, were considerably strengthened. This upsurge in American influence placed the U.S. in a far more advantageous position vis-à-vis the U.S.S.R. than had heretofore prevailed. Unlike Moscow, Washington had developed leverage with both Israel and the Arab world and, indeed, within the latter, with ideologically opposed states. Now the U.S. found itself in the unusual position of initiating policies rather than responding to the actions of the U.S.S.R. in the region. Thus, it was not surprising that some observers went so far as to argue that the real victor in the October crisis, at least in the short term, was the U.S.

How long the U.S. would enjoy its new position depended not only on continuing movement on the Arab-Israeli question but also on how the question of oil prices would be resolved. This issue, too, would inevitably have risen, even in the absence of an embargo, although the speed and magnitude of the change would probably not have been as great, and consumer nations would have been better able to gradually adjust to a situation that presented grave challenges to the international monetary system. After all, the Shah of Iran, one of the leaders in the drive for higher oil prices, did not participate in the embargo and publicly called on the Arabs to change their policy. 7 His position on this issue was far more obdurate than that of Saudi Arabia, whose leaders publicly argued for lower prices. Despite continuing assurances by both Faisal and Saudi Minister of Oil and Minerals, Sheikh Ahmad Zaki al-Yamani, however, the only progress that was evident was the freezing of oil prices during an inflationary period. To what extent this action represented a favorable portent for future reductions in price was unclear, but there was no mistaking the fact that the Saudis were responsible for preventing consideration of a price hike advocated by Kuwait during the Organization of Petroleum Exporting Countries (OPEC) ministerial meetings in February 1975.

While Washington tried hard to persuade Saudi Arabia to help push oil prices down, it continued to develop a comprehensive policy of cooperation with the consuming nations to deal with all facets of the energy problem. 8 After the embargo, it had seized the opportunity to pursue its long-standing goal of creating a consultative partnership with Europe and Japan as a framework for dealing with political, military, and economic differences.9 Within the context of the oil crisis, this translated into a stress on a multilateral approach in dealing with the producer countries.

Although both Japan and the major European states were leery of a confrontation with the producers and hence concluded a series of bilateral agreements with the latter, Washington persisted in its efforts and, by 1976, had achieved some notable successes. Despite intense French opposition at the Washington Energy Conference in February 1974, West Germany, Netherlands, Belgium, the U.S., and seven other nations agreed, inter alia, on a comprehensive action program, financial and monetary measures to preclude comprehensive depreciation of currencies, plans for a conference with producers, and the establishment of an Energy Coordinating Group (ECG) composed of senior officials and ad hoc working groups.

Specifically, the ECG members reached agreement on oil sharing in case of an embargo, on the development of alternate sources of energy, and on the need to cut back consumption. They also established a $25 billion "safety net" to support consumers with balance of payments difficulties as well as a $6 billion oil facility within the International Monetary Fund. Moreover, the International Energy Agency (IEA) was created.

All of these measures were designed to lead to the emergence of a common policy on the part of the consuming nations in preparation for negotiations with OPEC. Concomitantly, Kissinger sought to exploit the potential divisions within OPEC that stemmed from political and economic differences, particularly the differing absorptive capacities of such countries as Venezuela and Iran on the one hand and Saudi Arabia and Abu Dhabi on the other. Specifically, he called for an increase in the world surplus of oil through conservation as well as an agreement on means (preferably a floor price on oil) to spur and maintain the development of alternative sources of energy prior to a producer-consumer conference.

Such cooperation was not easily achieved because of the differing positions of the consumers in regard to energy. The U.S. was the least dependent on oil imports and was the leader in the development of new technologies. Great Britain hoped to become selfsufficient in a few years through the North Sea finds. France, on the other hand, had no such expectations and sought to maximize its exports to oil producers and to develop strong bilateral ties with them. At the same time, President Valéry Giscard d'Estaing, dependent upon Gaullist support, was concerned with the possibility of American dominance of the new IEA, and he moved cautiously to coordinate his policy with that of the U.S. Despite such differences, a new relationship was cemented in the compromise agreement reached in December 1974 when he met with President Gerald Ford on the island of Martinique. Washington acceded to the desire of Paris for a conference of major importers and oil producers to discuss questions of price, with the lesser developing countries participating, while the French agreed to a preliminary producer-consumer meeting to work out procedural matters in March. This was to be followed by intensive consultations among consumer nations to prepare for the conference, clearly a French concession to the American position, which held that major oil consumers should work out a joint policy prior to the conference with the producers.

Both the actions taken by the U.S. in the Middle East and in regard to consumer cooperation were designed to fashion an environment less conducive to the use of the oil weapon by the Arab states. And it is clear today that several factors do in fact militate against the imposition of an effective boycott. First of all, it is worth repeating that the October embargo was effectuated only after the U.S. began its massive resupply of Israel. Since recent estimates suggest that Israel is capable of fighting a two- to three-week war, thanks to the infusion of American equipment, Washington seems to have gained precious time. Indeed, it is altogether possible that Israel could achieve military success before there is any need for U.S. assistance that could, in turn, generate increased pressure for an embargo.

A second factor that might give OAPEC second thoughts, or at a minimum cushion the effects of an embargo, is an outgrowth of both the bilateral and multilateral steps taken by Europe and the U.S. to deal with the petroleum crisis. Inasmuch as Arab-European relations have improved dramatically since the October War, OAPEC would be hard pressed to justify reducing petroleum supplies to Europe as it did in October 1974. Sadat himself acknowledged this in an interview in Le Monde (Paris), January 22, 1975, when he said that "it would be absurd to punish countries like France which have maintained a fully objective attitude toward the Arab-Israeli conflict." Furthermore, the Egyptian President answered yes when asked if Europe would be spared an economic reprisal. This changed Arab perception of Europe is important when we recall that not only were production cutbacks considered an essential adjunct of the 1974 embargo but also that the Arabs saw European vulnerability as a means to pressure the U.S.

A third development that would seem to undermine plans for a future embargo are the economic steps taken since October 1974. With the oil-sharing agreement in the summer of 1974, the industrialized states clearly established the means for mitigating the effects of an OAPEC embargo, especially if it were selective, while in the economic realm the investments of Arab petro dollars in the West (e.g., U.S. treasury bonds, industry, etc.) and their increased dependence on Western imports gave the Arabs a stake in the economic health of the West.

Fourth, the Arabs have become even more dependent on the U.S. for military equipment and training, thus reinforcing a trend that started before the embargo. And, besides the perceived threat from the U.S.S.R. which remains, the Persian Gulf area has recently become the scene of a local arms race involving a number of states which, while not openly hostile, are nevertheless interested in establishing a modicum of equilibrium in the area (e.g., Saudi Arabia versus Iran).

Finally, one must consider the changes in emphasis in American policy in the Middle East. Whereas prior to the embargo the Arabs criticized the U.S. for its relative inactivity, since that time Secretary Kissinger has made a tireless effort to arrive at a settlement, and changes have occurred in U.S. policy. Nevertheless, it would be a mistake to exaggerate their importance, for, in the final analysis, the U.S. did not alter its pre-embargo objectives, did not disavow its commitment to Israel's security, and did not yield to the initial demands published by the Organization of Arab Petroleum Exporting Countries. Moreover, the U.S., unlike Japan and leading European states, assiduously avoided even the intermediate step of endorsing the Arab version of Security Council Resolution 242.

The argument that the much greater dependency of America's allies on Middle Eastern oil accounted for the disparity in policy responses is much too simple in that it ignores both the domestic and strategic considerations that inform U.S. policy. U.S. officials were well aware that a policy shift of the magnitude envisaged by OAPEC's original declaration would have generated an acrimonious internal political struggle and would have produced profound political repercussions on America's political position in the international system.

The principal lesson to be derived from the embargo, therefore, is well established in international politics: when the economic instrument of statecraft is directed against a vital aspect of a great power's interests, such as the credibility of its commitments, that country will react not with capitulation but rather by adjustments in the style and tactics of its foreign relations while simultaneously seeking to minimize its future vulnerability through a combination of domestic and international moves. The American-European cooperative efforts represent just such an attempt. At the same time, however, the U.S., having already made the kinds of policy changes that can be reasonably anticipated from a great power with far-flung security commitments, may well feel compelled to respond more strenuously to a new embargo. Judging from the Arab press and official statements, this possibility is taken seriously and, as a consequence, will no doubt give OAPEC pause in the event it contemplates another embargo.

Clearly many factors, such as pressures from radicals, considerations of Arab honor, the emotionalism generated by hostilities, and the fragility of crisis decision-making, could well lead to another embargo. Yet, the situation today is very different from that of October 1973. In the new context it will be far more difficult for OAPEC to reach an embargo decision or to make an embargo an effective weapon. Since a new embargo would hardly benefit anyone, especially the conservative Arab states, wisdom counsels a realistic assessment of the limited potential benefits and high costs attached to a renewed use of the oil weapon.

Denver University and
The National War College

Notes

1. Al-Anwar (Beirut), November 22, 1973; Ai-Jumhuriyah (Cairo), November 22, 1973.

2. "U.S. Foreign Policy for the 1970's: Shaping a Durable Peace," a report to the Congress by Richard Nixon, President of the United States, May 3, 1973 (Washington: U.S. Government Printing Office, 1973), pp. 134-42.

3. Statement by Assistant Secretary Joseph J. Sisco Before the House Near East Sub-Committee, June 6, 1973, Press Release No. 197 (Washington: Department of State, 1973), p. 1.

4. Text of Arab Statement in Vienna on End of Embargo, New York Times, March 19, 1974.

5. Al-Yawm (Beirut), January 9, 1975.

6. Interview of Secretary of State Henry A. Kissinger, Business Week, January 13, 1975.

7. Al-Hawadith (Beirut), November 23, 1973.

8. For a persuasive argument on behalf of consumer cooperation, see Energy: The Imperative for a Trilateral Approach, The Triangle Paper: 5 (Brussels, The Trilateral Commission, June 23-25, 1974).

9. "U.S. Foreign Policy for the 1970's," pp. 77, 80-81.


Contributor

Major Bard E. O'Neill (Ph.D. Denver University) is Visiting Professor, Department of Military and National Security Affairs, The National War College, Washington, D.C. He was Associate Professor of Political Science at the United States Air Force Academy, where be specialized in Africa and the Middle East, insurgency and American foreign policy. Major O'Neill has served with the 90th Strategic Missile Wing and the 3d Tactical Fighter Wing in Vietnam. He is the author of Revolutionary Warfare in the Middle East; coeditor and contributor to The Energy Crisis and U.S. Foreign Policy (Praeger, 1975); and coeditor and contributor to Political Violence and Insurgency: A Comparative Approach (Phoenix Press, 1974). Major O'Neill is a previous contributor to the Review.

Dr. Joseph S. Szyliowicz (Ph.D., Columbia University) is Professor of International Relations, Graduate School of International Studies, Denver University. He is author of numerous articles and books on Middle Eastern Affairs, including The Energy Crisis and U.S. Foreign Policy (editor and contributor) and the highly acclaimed Education and Modernization in the Middle East. He is currently Martin Professor, Harry Truman Institute, Jerusalem, Israel.

Disclaimer

The conclusions and opinions expressed in this document are those of the author cultivated in the freedom of expression, academic environment of Air University. They do not reflect the official position of the U.S. Government, Department of Defense, the United States Air Force or the Air University.


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