How Successful Was The Attempt By Opec To Use Oil As A Political Weapon?

2288 words - 9 pages

The Organisation of (Arab) Oil Exporting Countries (OPEC)'s move to raise oil prices and to limit output and distribution to the Western world came at a time when there was a rapid growth of demand for oil in the United States due in part to Nixon's anti-inflation policies, and other factors such as new environmental restrictions on coal burning. The US had lowered its import barriers and became more dependent on the world market, mainly the Middle East, than ever before. In 1973, panic buying of oil was already raising the prices. However, the share of revenues for the oil exporters had been decreasing and the prices were unguaranteed, and so it was demanded that the price agreement be promptly rewritten. The shift of power from the oil companies to the oil exporting countries was by this time in full swing. These state of affairs opened the door for the comparative success of the oil weapon, which before had decidedly failed during the Suez Crisis and the Six-Day War. The changing conditions coincided with the political developments between Israel and Egypt.The political oil weapon is defined in this essay as the manipulation of oil price and production in order to wield power over the international system. For many years before, the oil weapon had been thought of as a way to achieve Arab objectives regarding Israel and with the coming of the war in 1973 its moment had come. It was also a way to further grander aims on the part of OPEC, as laid out below. This was a political motive, but it was also one heavily intertwined with economics. There will be a discussion of aims, successes and failures in both sections of the essay, starting with the Arab-Israeli motive and then OPEC's.Only the relatively immediate success of OPEC will be considered, and so there will be no discussion of events such as the collapse of the Shah's Iran and the inability to duplicate OPEC's success that had later reversed to some extent the results of the oil weapon.The aim for the Arab-Israeli conflict and its successTowards the end of 1973, OPEC utilised its new-founded monopoly on oil to raise prices and create an embargo against pro-Israeli countries, especially the US, in order to compel them to withdraw support in the Arab-Israel conflicts, mainly that of the Yom Kippur/October War. In this war, the president of Egypt, Anwar Sadat, had the aim of forcing Israel to the negotiating table to discuss the withdrawal of Israeli troops from the Sinai in Egypt.The effect on the US - The US's aim was to stimulate negotiations from the beginning, and so its policies of aid to Israel were aimed at ensuring that both sides were on equal stance and would both have reason to negotiate. The response by the US was influenced by fears of general instability that could result from the oil embargo. On the 27th October, Egypt and Israel met for talks after a ceasefire, while a new dialogue had been opened between Egypt and the US. These talks led the way for an eventual withdrawal...

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