Oil embargo of 1973-1974
The Oil Embargo of 1973-1974 was a significant geopolitical event that stemmed from the Yom Kippur War, which began on October 6, 1973, when Egypt and Syria launched a surprise attack on Israel. In response to U.S. support for Israel during the conflict, Arab members of the Organization of Petroleum Exporting Countries (OPEC) declared an oil embargo against nations supporting Israel, with the United States being the primary target. As a result of the embargo, oil prices soared from under $3 to over $11 per barrel, leading to economic turmoil in many industrialized countries and contributing to a global recession. The embargo lasted for about five months, during which negotiations were initiated, ultimately resulting in a disengagement agreement between Egypt and Israel in January 1974.
While the embargo aimed to exert political pressure, it did not significantly alter U.S. support for Israel or lead to the desired political outcomes for the Arab states involved. However, it did enhance the economic power of OPEC nations in the short term. The crisis also prompted a reevaluation of energy policies in Western countries and a stronger commitment from U.S. policymakers to address the Arab-Israeli conflict, which eventually contributed to the Camp David Accords in 1978. The event remains a pivotal moment in both Middle Eastern politics and global energy dynamics.
Oil embargo of 1973-1974
The Event Refusal of Arab countries to sell oil to pro-Israeli countries
Date October 17, 1973-May 17, 1974
In the midst of the fourth Arab-Israeli war, Arab countries decreased oil production and placed an embargo on shipments of crude oil to countries with close ties to Israel, especially the United States and the Netherlands.
On October 6, 1973, which was the Jewish holy day of Yom Kippur, Egypt and Syria conducted a surprise attack against Israel. The Soviet Union provided assistance for the invasion. At first it appeared that the two Arab nations might defeat the Israelis. However, on October 14, U.S. president Richard M. Nixon responded by ordering a massive airlift of weapons and supplies to Israel, and the airlift continued for a full month. It included approximately fifty-six combat aircraft, and 28,000 tons of equipment, enabling Israel to recover and then to prevail in the conflict.
The economies of almost all industrialized countries were highly dependent on imported oil. Even the United States, while less vulnerable than Western Europe, was importing 35 percent of its energy needs. Most of the major exporting countries belonged to the Organization of Petroleum Exporting Countries (OPEC), an international cartel established to regulate the supply and prices of oil. The Arab members of the cartel, including Saudi Arabia, Iraq, Libya, and the Arab Emirates, together produced more than half of the world’s oil.
On October 17, the Arab oil ministers announced a cut in oil production and a rolling oil embargo on supporters of Israel. Two days later, after Nixon pledged $2.2 billion in aid to Israel, Saudi Arabia and other Arab countries announced a total embargo against the United States. Soon thereafter, the Arab embargo was extended to the Netherlands, which was the largest entrance point for oil flowing into Western Europe.
During the five months of the embargo, oil prices rose to unprecedented levels—from less than $3 a barrel to a high of $11.65 in January, 1974. This increase significantly harmed the industrial counties and contributed to an international recession. Secretary of State Henry Kissinger made numerous trips to the Middle East in order to negotiate an end to the conflict. On January 18, 1974, Egypt and Israel entered into a disengagement agreement. On May 17, the Arab oil ministers, with the exception of Libya, finally agreed to end the embargo.
Impact
Ultimately, the Arabs failed to achieve their political demands because of the cash-flow needs of OPEC countries with large populations, especially non-Arab countries such as Venezuela, Nigeria, and Indonesia. Even though the embargo resulted in price increases and long lines to purchase gasoline in the United States, it never substantially disrupted the supply of oil. For about a decade, the OPEC countries, especially those of the Middle East, gained substantial wealth as a result of the “oil shock.” The price of oil, however, declined because of the discovery of new fields, the enhanced production of older fields, and the conservation activities of the importing countries.
Although the Arab embargo had limited influence on the diplomatic policies of Western Europe and Japan, it did not substantially affect the pro-Israeli commitment of the United States. As a result of the embargo, American policy makers became more determined to seek a settlement in the Arab-Israeli conflict. The countries of Israel and Egypt, moreover, emerged from the Yom Kippur War with large debts and a growing reliance on American assistance. For these reasons, the war and the embargo helped make possible the Camp David Accords of 1978.
Bibliography
Congressional Quarterly Editors. The Middle East. 9th ed. Washington, D.C.: CQ Press, 1999.
Little, Douglas. American Orientalism: The United States and the Middle East Since 1941. Raleigh: University of North Carolina Press, 2004.
Rabinovich, Abraham. The Yom Kippur War: The Epic Encounter That Transformed the Middle East. New York: Schocken Books, 2004.