Nareman Amin “Sorry, Out of Gas”: Implications of the 1973 Oil Embargo on U.S. Foreign Policy

In a Cold-War world, any

international dispute had the

potential to escalate and involve

the two superpowers, the Soviet

Union and the U.S. Although the two

states vied for political hegemony

of the geopolitical scene, by the

1960s and 1970s, both parties,

weary of the possibility of a

nuclear war, sought to end arising conflicts before they

became too serious. One such war that the two powers feared

would escalate began on October 6, 1973, when Egypt and

Syria jointly decided to pre-emptively attack Israel to

retrieve lands Israel had won in earlier wars.

Hoping to end the conflict in an appeasable manner, the

two powers communicated constantly. All the while, the U.S.

was resupplying Israel with military and economic aid, and

the Soviet Union replenished the Arab armies, each trying to

satisfy their “client states.”

But when several Western countries, including the U.S.,

began to supply Israel with weapons and support, several

rentier Arab states, mainly those in the Organization of

Petroleum Exporting Countries (OPEC), declared an oil

embargo on the U.S. and all countries supporting Israel. As

several of these Western countries were heavily dependent on

the Middle East for oil, some of them backed down. The U.S.,

however, was not ready to. Then U.S. president Richard Nixon

was determined to keep Israel alive.

This paper aims to study the implications the embargo

had on U.S. foreign policy toward the region at the time and

whether it played a role in securing the ceasefire.

The embargo and production cuts can be seen as one of

the rare moments in history in which Arab states took

collective action to promote their political goals. The

embargo had economic ramifications that would carry over

well into the following years. Many scholars have argued

that it led to an “energy crisis” worldwide; it “marked the

end of the era of cheap gasoline and caused the share value

of the New York Stock Exchange to drop by $97 billion.” It

is also arguably one of the causes of the recession that

followed.1

This paper finds that the oil embargo itself did not

directly push the U.S. to seek a ceasefire and that the U.S.

would have sought a ceasefire with or without the embargo,

since it wanted to end the Middle Eastern stalemate. What it

does argue is that the embargo did, however, shift the

1 “OPEC states declare oil embargo”. History Channel. Web. http://www.history.com/this-day-in-history/opec-states-declare-oil-embargo Accessed October 12, 2013.

Amin 2

balance of power and caused a dramatic rift between the U.S.

and its allies. It may be argued, then, that it did expedite

the peace-making process because it added a sense of urgency

and a wave of panic worldwide.2

History of OPEC

In September 1960, five oil-producing countries, Iran,

Iraq, Kuwait, Saudi Arabia and Venezuela, created the

Organization of the Petroleum Exporting Countries (OPEC) and

were later joined by others, including Nigeria, Algeria, the

United Arab Emirates and Indonesia.3 The main aim of the

intergovernmental organization was to empower the oil-

producing countries by guaranteeing their right to “exercise

permanent sovereignty over their natural resources in the

interest of their national development.” More specifically,

OPEC’s objectives are to co-ordinate and unify petroleum policies among Member Countries,

in order to secure fair and stable prices for petroleum producers;

an efficient, economic and regular supply of petroleum to

consuming nations; and a fair return on capital to those investing

in the industry.4

Reportedly, at first, the United States refused to recognize

the organization, imposed sanctions on it and forbade its

oil companies from negotiating with it. In response, OPEC 2 See Edward R. F. Sheehan’s “How Kissinger Did It: Step by Step in the Middle East”. Foreign Policy. 22 (Spring, 1976), 3-70; 20-21. 3 Membership today is quite different, but the Arab countries listed herein are still members. 4 Organization of Petrol Exporting Countries. “Brief History”. Web. http://www.opec.org/opec_web/en/about_us/24.htm Accessed October 15, 2013.

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developed “joint negotiating positions with the

understanding that any member able to gain an additional

advantage on its own should do so.” In turn, “Any gains

would constitute a new floor for bargaining in the next

round.” This arrangement brought incremental revenues to

OPEC’s members, while increasing the organization’s

international stature and attracting new members. 5

But the organization was not free of problems. Oil-

importing countries, including the U.S., “demonized OPEC as

the primary cause of worldwide economic decline.” Inside the

organization itself, differences and disagreements between

members were common. Saudi Arabia, with its small population

and huge oil reserves, for example, favored moderate-priced

oil to encourage countries and companies to buy from them.

Countries with large populations and small oil reserves like

Algeria, to the contrary, wanted to sell oil at higher

prices in order to finance its development projects.

Interests often clashed.6

OPEC’s success, however, in its command of the oil

market, encouraged countries of the geographic South with

various raw materials and natural resources to seek ways in

which they can establish their own cooperative

organizations. Thus, in June 1964, the Group of 77 was

created at the end of the first session of the United 5 “Organization of Petroleum Exporting Countries (OPEC)”. Encyclopedia of theModern Middle East and North Africa. 2004. Web. Quoted on http://www.encyclopedia.com/topic/OPEC.aspx Accessed October 12, 2013. 6 Ibid.

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Nations Conference on Trade and Development (UNCTAD). The

intergovernmental organization provided the means for the countries of the South to articulate and promote

their collective economic interests and enhance their joint

negotiating capacity on all major international economic issues

within the United Nations system, and promote South-South

cooperation for development.7

These countries, despite their diversity and possibly

conflicting interests, came together, like OPEC, to

collectively try to better their social and economic

conditions. Today, it is the largest intergovernmental

organization of developing countries in the UN.8

The 1973 War

On October 6, 1973, Egypt and Syria jointly attacked

Israel, taking it by surprise. Initially, the Arabs were

winning and spirits were high. Then Egyptian President Anwar

Sadat stood before Egypt’s People’s Assembly ten days after

the war began and declared, “No matter what happens in the

desert, there has been a victory that cannot be erased…

According to any military standard, the Egyptian armed

forces have realized a miracle. The wounded nation has

restored its honor; the political map of the Middle East has

changed.” In the course of this speech, he also addressed

President Nixon in what he called an “open letter”, in which

7 The Group of 77. “About the Group of 77”. Web. http://www.g77.org/doc/Accessed October 17, 2013. 8 Dahrendorf, Ralf. “International Power: A European Perspective”. Foreign Affairs. 56:1 (Oct. 1977), 72-98. http://www.jstor.org/stable/20039807 Web. Accessed November 15, 2013.

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he listed concrete peace proposals. He called for a

ceasefire, “provided that the Israelis would, under

international supervision, withdraw to the pre-1967 war

boundaries” and “an international peace conference at the

U.N. to be attended by Palestinian as well as Arab leaders.”

Although these terms would not be acceptable to Israel, the

confidence with which Sadat addressed the U.S. and Israel

marked the end of a humiliating period after the defeat of

1967.9

Contrary to the 1967 War in which Israel had

immediately destroyed Egypt’s air force, in the 1973 War,

Egypt had Soviet-made missiles (SAMs) planted on both banks

of the Suez Canal, ready to aim at and destroy Israeli

planes. Consequently, in the first week of the war, Israel

lost almost one-forth of its air force to these missiles. It

decided, instead, to attack Egypt on the ground. The

Egyptian army was also able to create a bridge across the

Suez, managing to move more than 70,000 troops and

approximately 500 to 700 tanks to the eastern bank of the

canal, a maneuver that was deemed “a remarkable logistical

feat by any military standard.”10

So much speculation surrounds how both the Egyptian and

Syrian armies were able to outmaneuver Israel in the early

stages of the war. Scholarship shows that Soviet advisors

9 "Arabs V. Israelis In A Suez Showdown." Time 102.18 (October, 1973): 24. Academic Search Premier. Web. Accessed November 13, 2013.10 Ibid.

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helped the Arabs strategize. Although Sadat had expelled

about 17,000 Soviet technicians in 1972 after the Soviets

would not provide him with the weapons he requested, Egypt

had around one thousand Soviet military advisors at the

outbreak of the war. Moreover, during the war, the Soviets

airlifted approximately 1,000 tons of combat material to

Egypt and Syria on a daily basis during the war.11 It is

also speculated that the Soviets helped the Syrian front by

supplying around 100 MIG fighter jets and advising the

military. But one of the key elements of the Arabs’ initial

success was, in fact, the element of surprise.12

Because of the heavy losses Israel initially incurred,

it appealed to the U.S. for help. Saudi Arabia sent its

foreign minister, Omar Saqqaf, to plead directly with Nixon

for the U.S.’s non-intervention. That did not work; the

President, along with Congress and the general American

public, was for supporting Israel. In response, Saudi Arabia

not only supported the oil embargo but also spearheaded it,

immediately cutting production rates and stopping all oil

shipments to the U.S. and its facilities, as well as to the

Netherlands, which also sent military aid to Israel. Other

Arab countries followed suit, cutting off oil from the U.S.,

from the Netherlands and from some countries they felt were

too sympathetic to Israel. The effects, however, were not

11 "The Superpower Search For A Settlement." Time 102.18 (October, 1973):22. Academic Search Premier. Web. Accessed November 13, 2013.12 Ibid.

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felt immediately since some ships were already en route to

their pre-embargo destinations and could not be stopped.

Some embargoed states ultimately worried about a shortage of

energy for the winter months ahead.13

Legally, there was no treaty that bound either the

Soviet Union to defend or aid the Arabs or the U.S. to

defend or aid Israel. The U.S.-Israeli alliance, for

example, was, rather, a tradition U.S. presidents inherited

from one another.14 Scholars posit that, prior to the 1973

War, this relationship or alliance grew “stronger than

ever.”15 Nixon viewed Israel as the “strategic proxy” in the

Middle East that would counter the Soviet threat. He

reportedly explained to Kissinger, “Our interests are

basically pro-freedom and not just pro-Israel because of the

Jewish vote. We are for Israel because Israel in our view is

the only state in the Mideast which is pro-freedom and an

effective opponent to Soviet expansion.”16

Many, however, worried that this rearmament duel would

compromise the détente between the U.S. and the Soviet

Union. Russian Premier Alexei Kosygin reportedly said, “the

opponents of détente are trying to revive the cold war [sic]

and cause mistrust in peaceful coexistence by exploiting the13 Allen, Loring. OPEC Oil. (Cambridge: Oelgesclager, Gunn & Hain, 1979), 12. 14 "Should The U.S. Guarantee Israel?." Time 104.27 (December, 1974): 24. Academic Search Premier. Web. Accessed November 14, 2013.15 Bar-Siman-Tov, Yaacov. “The United Stated and Israel since 1948: A ‘Special Relation’?” Diplomatic History. 22:2 (Spring 1998), 231- 62; 246.16 Ibid, 243-4.

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hostilities in the Middle East.” Escalation of the war would

certainly have debilitated the fragile U.S.-Soviet Union

rapprochement.17

The Oil Embargo and OPEC’s Terms

In 1973, even before the embargo, the U.S. was

beginning to feel the effects of an oil “pinch”: “Domestic

reserves were low (about 52 billion barrels, a 10-year

supply); the United States was importing about 27 percent of

the crude petroleum it needed every year; and gasoline

prices were rising.”18 No doubt, the embargo and production

cuts imposed by OPEC exacerbated the situation. On October

17, just two days after Nixon announced he was going to

resupply the Israeli army with equipment, the Arab countries

in OPEC19 announced that they would punish any country that

supported Israel by “implementing production cuts of 5

percent a month until that nation [Israel] withdrew from the

occupied territories and restored the rights of the

Palestinians.” They also stated that they would place an

indefinite and total embargo on those states they deemed to

be “enemies” of the Arab cause.20

The move was “intended to exert pressure on Washington

through the nations of Western Europe and Japan, which are

17 "The Superpower Search For A Settlement."18 “OPEC states declare oil embargo”. 19 They were joined by Syria and Egypt to create the Organization of Arab Petrol Exporting Countries (OAPEC) in 1968. See Loring Allen’s OPECOil. (Cambridge: Oelgesclager, Gunn & Hain, 1979), 9-11.20 Ibid.

Amin 9

more dependent on Middle East oil than is the U.S.”21

Western Europe, in fact, imported 45 percent of its oil

needs from the Arab countries; Japan, 33 percent; and the

United States, approximately 5 percent.22 Indeed the

“governments of the most vulnerable consuming countries, in

Western Europe and Japan, reacted in near panic, seeking

ways to appease the Arabs on political matters and to obtain

economic deals that would assure them continued access to

Middle East oil at the new high prices.”23 So, some scholars

go so far as to say that it was not the U.S. who was

targeted to begin with, but the countries that would suffer

and ultimately push the U.S. to capitulate.

The measures taken to ensure the success of the embargo

were stringent. The Arab countries made sure to police the

embargo, and to track their cargo to ensure that there was

no sharing between states. To pressure oil-importing

countries even further, at a meeting on November 5, the Arab

countries agreed to uniformly implement a 25-percent cutback

on production. By then it was clear that “Arab unity was

holding, and the companies and consuming countries seemed

almost powerless.”24

21 "The Superpower Search For A Settlement." 22 Ahrari, Mohammed E. OPEC: The Falling Giant. (Lexington: University of Kentucky, 1986), 115. 23 Campbell, John C. “Oil Power in the Middle East”. Foreign Affairs. 56:1 (October, 1977), 89-110; 90. 24 Allen, 12-13.

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When the European Economic Community (EEC) declared

that it “supported a peace settlement on the basis of UN

Resolution 242, OPEC did not apply the December production

cuts to Europe.” 25 Then, in early December 1973, OPEC toned

down its initial stance, declaring, If agreement is reached on withdrawal from all the territories

occupied since 1967, foremost amongst them Jerusalem, in

accordance with a timetable which Israel agrees to and whose

implementation is guaranteed by the United States, the embargo on

exports to the United States will be lifted as soon as the

withdrawal program begins.

Later that month, OPEC members decided that Japan and

Belgium were friendly states “because they had supported the

Arab position.”26 In fact, any state that broke off

diplomatic ties with Israel was immediately considered “a

preferred country” and was no longer embargoed.27

By then, a full embargo was imposed against the U.S.

and several other countries, “prompting a serious energy

crisis in the United States and other nations dependent on

foreign oil,” and prices went up by 130%.28 Gas-guzzling,

American-made cars suffered a huge loss since people began

25 Graf, Rudiger. “Making Use of the ‘Oil Weapon’: Western Industrialized Countries and Arab Petropolitics in 1973-1974”. Diplomatic History. 36:1 (January 2012), 185- 208; 195. 26 Ibid. 27 Ahrari, 120. These countries including France, Spain, Britain, India,etc. 28 “OPEC enacts oil embargo”. History Channel. Web. http://www.history.com/this-day-in-history/opec-enacts-oil-embargo Accessed October 13, 2013.

Amin 11

to favor Japanese fuel-efficient cars.29 The U.S. was forced

to take various conservation measures: speed limits were

reduced from 60 miles an hour to 50 miles an hour; schools

were shut down to save energy; gas was rationed, and gas

stations were asked to close on weekends.30

One Time magazine article published in November 1973

claimed that the embargo reached far beyond the Arab-Israeli

conflict. If anything, the article continued, the embargo

made states realize that “the era of cheap and ample energy

is dead and that people will have to learn to live

permanently with less heating, lighting and transport and

pay more for each of them.”31 Consequently, the U.S. and

other affected states sought ways to conserve energy and

make sweeping changes to the lifestyle the people were used

to. Nixon called for the creation of an agency that would

research energy-conserving tactics to make the U.S. self-

sufficient.32 He made a speech, later that month, in which

he introduced Project Independence, a plan that was meant to

“free the United States from dependence on foreign oil by

1980.”33

The U.S., however, did not change its stance regarding

Israel even after the embargo, but Kissinger did “make

29 “OPEC states declare oil embargo”. 30 "The Arabs' New Oil Squeeze: Dimouts, Slowdowns, Chills." Time 102.21 (November, 1973): 110. Academic Search Premier. Web. 13 Nov. 2013.31 "The Arabs' New Oil Squeeze: Dimouts, Slowdowns, Chills."32 Ibid. 33 Allen, 16.

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frantic efforts to arrange a cease-fire, hoping to end the

hostilities and the embargo.” The U.S. maintained its

support of Resolution 242 but did not stop sending military

supplies to Israel. As mentioned earlier, the EEC

“capitulated, issuing on November 6, a strong statement

supporting Resolution 242 and the Arab stand on their lost

lands.” Along with Europe, Japan “announced that they

accepted the Arab view.” Britain, France and other states

began negotiating directly with the Arab states. Eventually,

however, the effectiveness of the embargo came into

question; leaks were commonplace, and states, made more

aware of their high level of energy consumption, began to

legislate conservation measures.34

The U.S., which was less vulnerable and less dependent

on Arab oil, “declared it would not bend the principles of

its foreign policy (which in this case meant support of

Israel) because of economic pressure and looked for ways to

lower the price”. Kissinger did not hide his feeling that

“the Europeans had been pusillanimous in the crisis and had

let their NATO ally down.” But, in essence, one can even

argue the opposite: the U.S., by not changing its attitude

towards Israel may have jeopardized European interests

further.35

By January 1974, the embargo and its effects began to

gradually fade away. Oil shipments returned to their pre-34 Allen, 13. 35 Campbell, 97.

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embargo levels and the immediate crisis was over. Saudi

Minister of Petroleum and Mineral Resources, Ahmed Zaki

Yamani, went on a tour around industrialized countries and

feared that the recession following the energy crisis,

exacerbated by the embargo, would cripple the U.S., Europe

and Japan. He believed that “the restrictive measures had

served their purpose in shocking the oil importers into

rethinking their policies.”36 He also stated that the Arabs

did not want the nations to suffer from the embargo. “We

only intended to attract world attention to the injustice

that befell the Arabs,” he said.37 Later, he met with Henry

Kissinger and told him that OPEC would be “more than happy”

to relax the embargo if Israelis, at least steadily, vacated

the lands they “captured from Arabs.”38

Finally, in March 1974, the Arab oil-producing states

lifted the embargo against Germany and Italy. Shortly

thereafter, they ended the embargo against the U.S. after

they “reassessed the results of the Arab oil measures in the

light of their basic objective which is to draw world

attention to the Arab question in order to create an

atmosphere conducive to the implementation of UN Security

Council Resolution 242.”39 So, although the conditions that

36 Allen, 16. 37 "From Output Squeeze To "Price Embargo." Time 103.1 (January, 1974): 44. Academic Search Premier. Web. 13 Nov. 2013. 38 "The Emissary from Arabia." Time 102, no. 25 (December, 1973): 40. Academic Search Premier, EBSCOhost (accessed November 13, 2013).39 Quoted in Graf, 196.

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OPEC had outlined when it first imposed the embargo were not

met, the Arabs proved that their oil weapon could be just as

powerful as military might. One proof of this was that “the

policies of Europe and Japan cooled toward Israel” following

the embargo. Ultimately, these countries “decided that their

relations with Israel were less important than were their

relations with countries that could assure the continued

flow of oil.” The U.S.’s stance toward Israel, however, did

not waver. But it did try to play the honest broker, “trying

to arrange an acceptable settlement without favoring either

side,” which was enough for countries like Saudi Arabia. In

short, it put pressure on Israel to make peace with its

neighbors and ultimately became “the Middle East

mediator.”40

Alternatively, some scholars argue that it was in the

embargoed countries’ interests to pretend that the embargo

was effective for several reasons: if the domestic

population was led to believe that there really was an

imminent threat of an oil shortage, oil consumption would

decrease considerably, improving the embargoed governments’

bargaining position; the embargoed countries can demonize

the embargoing countries, positioning themselves “as the

victim[s] of an unjustified aggression”; and appearing to be

struck hard by the austerity measures, the embargoed

40 Allen, 131.

Amin 15

countries can discourage the embargoing countries from

taking more severe measures.41

Some literature points to Nixon’s use of the embargo

and the looming energy crisis to divert attention from the

Watergate Scandal. He wanted to be seen as the hero who

could resolve the oil shortage, especially at a time when

his leadership was very much in question. Secretary of State

Henry Kissinger, on the contrary, had seen the ongoing

embargo as an advantage, that the U.S. was at a “position of

strength” and was “annoyed” by Nixon’s attempts to end the

boycott as soon as possible.42 The Ford Administration,

Kissinger says, also prioritized bringing an end to the

embargo.43 In the end, the U.S. learned to strategize after

the embargo. Along with its continued conservation measures,

it began building a stockpile. This lessened the likelihood

that another embargo could ever affect the U.S. again.44

Ceasefire Secured on October 25, 1973

The war was, no doubt, devastating for all three

countries involved. According to the U.S. Defense

Department, approximately 7,700 Egyptians, 7,700 Syrians and

4,500 Israelis were killed or wounded during the war, the

highest number of casualties in a war between these three

41 Graf, 200. 42 Graf, 204-5. 43 Kissinger, Henry. Years of Renewal. (New York, Simon and Schuster, 1999),668. 44 Singer, S. Fred. “Limits to Arab Oil Power”. Foreign Policy. 30 (Spring 1978), 53-67; 60-61.

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countries since the establishment of the Israeli state in

1948.45

Despite the Arabs’ early success, “the element of

surprise, the early losses they inflicted, their easy

penetration of the Bar-Lev Line along the east bank of the

Suez Canal and Israeli bastions in the Golan Heights”, the

Israelis managed to turn the odds in their favor in two

weeks, especially with the military aid from the U.S. They

took over Suez, and their armies were but 30 miles away from

Damascus, Syria and 45 miles from Cairo, Egypt. Though the

ceasefire was declared on October 22, the Israelis managed

to destroy a large number of missile and artillery sites and

isolate Egypt’s Third Army, “cutting it off from food for

its 20,000 men and fuel for its 400 tanks.” The Third Army

continuously tried to free itself but could not. Sadat then

called on the U.S. and the Soviet Union to send troops to

the Middle East to police the truce. He also demanded that

the Israelis return to the pre-ceasefire lines, before they

encircled the Third Army.46 His demand was not met, and

ceasefire violations continued well into November 1973.

Egyptian leaders warned that the war could erupt again. At

this, Israeli Defense Minister Moshe Dayan scoffed, saying

45 "First Aid For The Cease-Fire." Time 102.25 (December, 1973): 47. Academic Search Premier. Web. Accessed November 13, 2013. 46 "Brilliant Moves In A Final Battle." Time 102.19 (November, 1973): 48. Academic Search Premier. Web. 14 Nov. 2013.

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“The Egyptian Third Army was broken, and is kept alive by

our mercy”.47

Israel wanted to crush the Third Army, but the U.S.

sought only a limited Israeli victory “that would prove the

superiority of its patronage to Soviet patronage, so it

supported the encirclement, but not the destruction, of the

Third Army.” The U.S., of course, did not want to humiliate

Egypt, another dearly sought client in the region, and risk

further confrontation with the Soviets. The U.S. thus

threatened to terminate its airlift to Israel if Israel did

not comply and spare the Third Army. Because of its

dependence on the U.S., “Israel bowed to U.S. coercion.”48

And it was only then that the Soviets stopped sending

military aid to the Arabs as well.49

By October 22, a Middle East ceasefire (Resolution 338)

was “negotiated, written, and pushed through the U.N.

Security Council.” Undoubtedly, it was the joint effort

between the U.S. and the Soviet Union that led to the

negotiation of a ceasefire.50 Kissinger thus used this

cooperation as proof that détente was indeed still

effective. One “major” flaw the Resolution had, as

illustrated earlier, was that it “lacked an enforcement

47 "First Aid For The Cease-Fire." 48 Bar-Siman-Tov, 247.49 "Are The Russians The Real Winners?." Time 102.19 (November, 1973): 42. Academic Search Premier. Web. 13 Nov. 2013.50 Sagan, Scott D. “Lessons of the Yom Kippur Alert”. Foreign Policy. 36 (Autumn 1979), 160-177; 164-5.

Amin 18

clause.” There was no mention of how or when this ceasefire

would be implemented. Israel was incredulous; it seemed, to

Israelis, that “the resolution was… a fait accompli.” Israel

argued that it really had no say. But in the end, the

ceasefire gave the Israelis the chance to sit at the

negotiating table with Egyptians, a huge relief to both

sides.51

Kissinger realized that Sadat was “a man eager for

American friendship and willing to move cautiously toward

peace with Israel. But Sadat could not ‘betray the Arab

cause’ by making a separate deal with Israel.” There was a

lot for Sadat to consider: if he made peace with Israel, he

would be recognizing the Jewish state, which his neighbors

had not done yet; he would also be seen as giving up the

Nasserist Arab nationalism. Domestic issues within Israel

itself also made it difficult for the government to abruptly

shift its foreign policy. More interestingly, as Stanley

Hoffman observes, “it was in Israel's interest not to engage

in a global negotiation with the Arabs while they were

elated by the success of their oil strategy.” It would be

best, he argues, that Israel let matters drag out, “until

the time when Kissinger's common front of the consumer

countries, set up to deal both with the problem of energy

independence and with the problem of recycling the

petrodollars, had restored the broken world balance.”52

51 Ibid. 52 Hoffman, Stanley. “New Policy for Israel”. Foreign Affairs. 53:3 (April,

Amin 19

Gerald Hughes and Thomas Robb argue that the war caused

a significant rift in U.S.-Euro relations, though more

specifically, with Britain. They argue that the EEC,

“generally speaking, regarded the war as a regional conflict

that could have severe consequences far beyond the Middle

East.” Member states were worried about “the Arab ‘oil

weapon’ and sought to remain neutral, while hoping for a

swift end to the fighting.” European countries realized that

the U.S. sought to break the Soviet Union’s influence over

the Middle East. “At the onset of the conflict,” the authors

write, “Kissinger was warned that Britain (and other Western

European states) would disavow U.S. policy so as to ensure

access to Arab oil.” They say, though, that a few months of

the end of the 1973 War, Western European countries who were

“economically vulnerable and politically disunited, soon

fell into line over U.S. policy in the Middle East.”53

There is some speculation that the outcome of the war

would have been the same with or without the oil embargo.

But the world noticed what would happen if its oil supply,

1975), 405-31. http://www.jstor.org/stable/20039519 Web. 15 Nov. 2013; 407. Some scholars went so far as to call the embargo “outrageous economic rape”, which resulted in “low economic growth, high unemployment and inflation”that plagued the U.S. and its European allies. See Louis J. Walinsky’s “Coherent Defense Strategy: The Case for Economic Denial”. Foreign Affairs. 61:2 (1982), 272-91. http://www.jstor.org/stable/20041435. Web. 15 Nov. 2013.53 Hughes, R. Gerald and Thomas Robb. “Kissinger and the Diplomacy of Coercive Linkage in the ‘Special Relationship’ between the United Statesand Great Britain, 1969–1977”. Diplomatic History. 37:4 (2013), 861- 905; 883-5.

Amin 20

which was taken largely for granted, was disrupted.

Negotiations with OPEC at the time were not very fruitful.

In the U.S., for example, “Perceptions of the balance of

producer and consumer power changed so drastically that

within a month the U.S. antitrust laws were relaxed, and the

multinational oil companies were allowed to meet to consider

what they could offer to OPEC.” The oil companies would set

their price ceiling, but OPEC would demand more and still

get it. These multinationals “appeared finally to be

broken.”54

Peace treaty Secured in 1979

The Carter Administration brought along with it a new

approach to the Arab-Israeli conflict altogether. Carter

believed that a comprehensive settlement of the Arab-Israeli

conflict, including the Palestinian question, should be

reached through cooperation with the Soviet Union. He

believed that such a settlement would “stabilize the Middle

East, safeguard the oil supply, and stabilize oil prices,”

all of which were very important to him. This position

possibly made U.S.-Israeli relations tenser. Even before the

Camp David summit, Carter demanded that Israel withdraw to

pre-1967 borders and called for the self-determination for

54 Corradi, Alberto Quiros. “Energy and the Exercise of Power”. Foreign Affairs. 57:5 (1979); 1144-66. http://www.jstor.org/stable/20040277 Web. Accessed November 17, 2013; 1149.

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Palestinians. The tension reached its pinnacle when the U.S.

made the move to involve the Soviet Union in the settlement.

Israel prompted the Jewish lobby in the U.S. to protest

Soviet involvement, and Carter retreated. It was decided

that a separate peace between Egypt and Israel was the only

solution. As a means of forcing Israel into acquiescing with

the concessions that the U.S. enumerated, Carter assured

then Israeli Prime Minister Menachem Begin that, if he did

not concede, the U.S. will find it difficult to support

Israel militarily and financially. This was the only way

Carter got Begin to change his position, especially

regarding the Sinai settlements.55

In September 1978, Carter met with both Sadat and Begin

at Camp David to bring an end to the struggle between Egypt

and Israel, as well as find a settlement that included

“progress toward a Palestinian solution.” Arab nations were

no doubt split by Camp David and Sadat’s involvement.

Shortly thereafter, in March 1979, Egypt and Israel signed a

peace treaty, though the treaty did nothing to answer

questions about the unresolved status of the Occupied

Territories. Because Israel signed the peace treaty, Carter

rewarded the state by providing “more military and economic

aid to Israel than had any previous administration, $10.2

55 Bar-Siman-Tov, 250-1.

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billion in four years ($4.065 billion of it in grants).” The

U.S. matched Egypt and Saudi with military aid.56

Conclusions

Some scholars argue that even if the U.S. was not

heavily dependent on the Arab states for oil, the world oil

crisis did change the geopolitical balance. “Prior to 1973,”

George Ball explains, “it was possible for the United States

to pursue a policy of complaisance toward Israel with only

marginal concern for its own interests. Since the rise of

OPEC as a major factor in world affairs, America's interests

have become vitally and directly involved in a speedy

settlement of the Arab-Israeli conflict.” He suggests that

this, along with Israel’s noncompliance with and complete

disregard for American advice, caused a rift, though not a

break, in U.S.-Israeli relations. He writes, “In the minds

of Israeli leaders, the test of American friendship would

thus appear to be our [Americans’] unquestioning willingness

to continue our heavy subsidy, however aberrant Israeli

policies may seem.”57

The energy crisis spurred by the embargo and production

cuts put OPEC on the map, politically and economically

speaking; the balance of power shifted in favor of the oil-

producing states, “and reduced the status of the oil

56 Ball, George W. “The Coming Crisis in Israeli-American Relations”. Foreign Affairs. 58:2 (Winter, 1979), 231-56; 242-3. 57 Ibid, 246-9.

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companies almost to that of buyers and sellers of oil.” 58 In

his memoir Years of Renewal, Kissinger himself attested to

OPEC’s success; he writes “we were determined to prevent

other commodity producers from repeating OPEC’s success in

quadrupling oil prices, by means of forming similar

monopolies.”59 In fact, after facing these threats, the

industrial countries “agreed upon multilateral cooperative

arrangements for emergency oil-sharing and for maintaining

domestic oil stocks as a buffer against future oil

shortfalls emanating from political turmoil in the Middle

East or from embargoes.”60And finally, the International

Energy Agency (IEA) was formed in 1974 “as a means whereby

oil-importing nations’ strategies and tactics could be co-

ordinated and strengthened.”61

Undoubtedly both superpowers feared escalation and were

doing their best to contain the situation. This can be the

most important factor to consider when examining the U.S.’s

peacemaking role during and after the war. It can be argued,

thus, that the embargo did not change U.S. policy toward

Israel, but it did, in fact, play a major role in causing

other countries (mainly Europe and Japan) to pressure the

U.S. into securing a ceasefire as soon as possible and

58 Ahrari, 111. 59 Kissinger, Henry. Years of Renewal. (New York, Simon and Schuster, 1999),710. 60 Ahrari, 111. 61 Odell, Peter R. Oil and World Power. (Harmondsworth: Penguin Books, Ed. 5, 1975), 226.

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playing a more moderate role. It also directly played a role

in shifting European foreign policy toward the Middle East

and Israel, immediately causing a rift between them and

their ally, the U.S. It revived within all of these

countries a sense of vulnerability and inevitably prodded

them to seek independence from imported oil.62 Most

importantly, it helped end the impasse involving the Arab-

Israeli conflict.

62 Another embargo was attempted in 1979, following the Iranian Revolution but ultimately failed because the states were prepared for it. See also “Le Pétrole Et L’Islam”. Le Monde Diplomatique. (January, 1980), 5.

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