Oil Issues in the Mid-East
In 1971, the United States relied on the Middle East to meet 11.7% of its oil requirements, and imports were rising. Multiple nations in the region were rich with petroleum reserves and made their fortune off of their sales. The United Arab Emirates were established arguably to use these reserves most efficiently, and has seen its own fortunes skyrocket in the years since it began exploiting its reserves. Perhaps most importantly, many of these nations were not the closest allies of the United States.
Peter Flanigan, an influential aide to President Nixon, took notice of the potential effects of this dependence on foreign oil and petroleum, writing in a memo to the President that “it is obvious that long-range US energy policy must take account of the strategic importance of Mideast oil to the OECD nations including the United States.” The United States at that time had been steadily producing less of its own oil on a year-to-year basis while simultaneously importing more from foreign countries, particularly those in the Middle East. Flanigan noted that though these imports accounted for 2.9% of total US oil consumption, “imports from these sources are rising,” as they held “70% of known Free World oil reserves,” and much of these reserves came from countries that weren’t necessarily friendly to the US at the time. View the memo below:
The notion of energy independence has been prevalent throughout American history. Though the US has long been a major supplier of the world’s oil, American dependence on foreign oil began to rise significantly in the mid-twentieth century, and given the United States’ engagement in the Middle East, many felt that this wasn’t a positive development.
One piece worth noting is that members of RN’s cabinet were actually advocating for a kind of embargo against the oil-producing Arab states with more radical political aspirations. Flanigan notes that there were attempts made to “control the actions of the radical oil nations by denying them markets for their oil,” chiefly through encouraging a consortium of international oil companies and their respective nations to “take action designed to punish the radical Arabs economically and thus to stabilize oil politics throughout the Arab world.” According to the memo, the Department of Justice had already given this plan go-ahead clearance, granting these companies limited anti-trust immunity to negotiate with the radical producing countries.
Perhaps ironically, then, in the wake of President Nixon’s decision to help Israel during the Yom Kippur War, the Organization of Arab Petroleum Exporting Countries (OAPEC) organized their own embargo against the United States. In retaliation for US support of Israel in 1973 and calling it a “principal hostile country,” OAPEC raised the price of oil from $3 to $12 per barrel. Not only was the international economy affected for years to come, but the rift between the Arab countries and the United States was not fully repaired until Henry Kissinger managed to get Israel to concede some of their territory.