When Egypt and Syria launched their surprise attack against Israel in October 1973, they changed the ground rules for post-World War II international relations. United States support for Israel triggered an Arab oil embargo and American car owners found themselves standing in line for gasoline. The fighting stopped on October 26, 1973. Two days later Egyptian and Israeli military representatives met for direct talks, but the embargo was not lifted. Under the terms of the embargo, Arab exporters imposed restraints on oil production and a total ban on the export of oil to certain countries. The ban initially targeted only the United States and the Netherlands, but was later directed against Portugal, South Africa, and Rhodesia as well.
The embargo triggered a sharp increase in oil prices, which allowed the Arab producers to cut exports without losing revenues. Resulting shortages in the market evoked fear and anxiety among consumers; oil companies started to purchase oil in a panic, which increased inventories and created heightened demand on the market. Price increases of 40 percent and "gas lines" soon became the most prominent symbols of America's loss of independence over its oil supplies.
All the major industrial countries suffered an economic downturn as a result of the increases in the price of oil. The U.S. gross national product decreased by 6 percent between 1973 and 1975, and unemployment doubled, reaching 9 percent. However, the effect of the embargo was felt most strongly by the poorest developing countries, which had no oil of their own and not enough hard currency to import the valuable commodity. The developed countries quickly devised new energy policies in order to lessen their dangerous dependence on the volatile Middle East producers. In February 1974 the United States convened an energy conference in Washington to develop a consensus among oil consumers to establish common policies in times of emergency. Among the conference's lasting achievements was the establishment of the Paris-based International Energy Agency (IEA). As a result of IEA initiatives targets for government-controlled strategic oil reserves were established. This led to the creation in the mid-1970s of the U.S. Strategic Petroleum Reserve. The United States built the Trans-Alaskan pipeline and gained access to the huge Alaskan oil deposits. In 1975 it adopted fuel efficiency standards for the automobile industry. Conservation efforts and searches for alternative sources of oil increased worldwide. 4O
The most significant new sources of oil were Alaska, Mexico, and the North Sea. Although the contribution of these deposits to the global market gradually increased in significance, the Organization of Petroleum ExportingCountries (OPEC) continued to be dominant through the 1970s, accounting for 65 percent of the total "free world" oil production in 1973 and 62 percent in 1978. 41 The political impact of OPEC's strength during this period was dramatic. For the next ten years, influence over oil prices by key Middle East states had a profound effect on the global economy and the security of the Middle East. Not since the late 1940s had the Middle East assumed such strategic importance. The real price of oil began to decline by 1975 because of high worldwide inflation. As demand fell OPEC's position became increasingly shaky and was only saved by the second oil shock of the Iranian Revolution.
Virtually overnight new or long-submerged hypotheses about internationalrelations sprung into vogue with a focus on the impact of resource scarcity on political behavior and the role of force. Oil was the most visible scarce resource, but soon other energy-related minerals including coal and natural gas were added to the list as were metals such as platinum, minerals such as bauxite, and food products and water.
The concern about resource scarcity was paralleled with concern that the West's dependence on maritime trade and sea routes would make it vulnerable to the growing power of Soviet projection forces, especially the Soviet navy. Of particular importance was the West's dependence on Middle East oil and the proximity of that oil to the Soviet Union and Soviet-backed surrogates. It was feared that if the oil fell under Soviet control, Moscow would be in a position to dictate economic terms to Europe and Japan and significantly change the global balance of power.The Suez Canal was closed as a result of the 1973 war and in any case the new supertankers coming into service were too big to use it, so increasing quantities of oil from the Persian Gulf were shipped to Western Europe and the United States via the Cape. As shown in maps 12 and 13, the daily shipment of oil through the Strait of Hormuz grew from about 2,400,000 barrels a day in 1957 to nearly 18,000,000 barrels a day in 1975, reflecting the staggering increase in overall demand for Persian Gulf oil as the economies of the OECD (Organization for Economic Cooperation and Development) countries grew.
To ensure that this flow of oil would not be disrupted, the United States and its allies developed an elaborate strategy to defend the Persian Gulf in the event of hostilities with the Soviet Union. The key pillar of this regional strategy was the pro-Western regime of Iran, ruled by Shah Mohammad Reza Pahlavi. By the 1970s strategy in connection with the Gulf was focused on the ability of the United States to project enough military power into the region and to deploy sufficiently forward to defeat any Soviet invasion. This ability was contingent upon a front-line defense of the Zagros Mountains in Central Iran, on the assumption that Soviet ground forces would run into major geographic obstacles if they attempted an invasion from Azerbaijan or from Turkmenistan. As long as the United States had access to major air bases in Turkey and Saudi Arabia, Soviet supply lines would be vulnerable to interdiction, and a Sovietadvance could be sufficiently slowed to allow time for the Zagros deployment to take place.
This strategy assumed that Iran would be a U.S. ally in the event of a Soviet invasion; that Soviet airpower could be neutralized by a formidable U.S. air defense of the region; and that the Arab Gulf nations, especially Saudi Arabia, would provide base facilities. To some extent the U.S. strategy for defending the Gulf against a Soviet attack had similar features to the plan developed by Britain in 1942 to protect the region in the event that the German offensive in the Caucasus succeeded and was followed by an attack through Iran and Iraq.
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