The Arab Use of Oil: October 1973—July 1974
| Published date | 01 March 1976 |
| Author | Jerome D. Davis |
| Date | 01 March 1976 |
| DOI | 10.1177/001083677601100104 |
| Subject Matter | Articles |
The
Arab
Use
of
Oil:
October
1973—July
1974
JEROME
D.
DAVIS
Institute
of
Political
Science
University
of
Aarhus,
Denmark
Davis
J.
The
Arab
Use
of
Oil:
October
1973-July
1974.
Cooperation
and
Conflict,
XI
,
1976,
57-67.
What
happened
in
the
period
October
1973-July
1974,
with
respect
to
the
Arab
use
of
the
oil
’weapon’?
How
did
it
happen
and
why?
The
embargoes,
production
cuts,
and
price
rises
which
characterized
the
period
were
not
the
result
of
a
tightly
knit
’cartel’.
Neither
were
they
the
product
of
sheer
happenstance.
In
fact
the
events
of
this
period
were
the
logical
outcome
of
historical
trends
in
the
international
petroleum
industry
and
of
the
delicately
balanced
Arab
coalition
against
Israel.
In
this
latter
respect,
crude
oil
was
used
as
a
means
of
diplomatic
leverage,
as
a
complement
to
Arab
objectives
both
in
the
October
war
and
in
the
round
of
diplomacy
which
ensued.
Nor
should
the
rise
in
prices
during
this
period
be
credited
wholly
to
the
Arab
nations.
Iran
was
the
’hard-liner’
in
the
critical
meeting
of
the
’Gulf
Six’,
whose
decisions
have
resulted
in
one
of
the
most
massive
resource
transfers
in
history.
Jerome
D.
Davis,
Institute
of
Political
Science,
University
of
Aarhus,
Denmark.
During
the
festivities
of
Yom
Kippur,
on
6
October
1973,
Egyptian
troops
crossed
the
Suez
canal
and
Syrian
forces
moved
into
the
Golan
Heights.
The
October
war
had
begun.
Eleven
days
later,
the
Or-
ganization
of
Arab
Petroleum
Exporting
Countries
(OAPEC)
sought
to
employ
global
dependence
on
crude
oil
to
stra-
tegic
advantage
by
declaring
an
imme-
diate
five
per
cent
cut
in
Arab
oil
pro-
duction,
and
warning
of
additional
fu-
ture
five
per
cent
monthly
cuts,
’until
Israel
withdraws
from
all
occupied
ter-
ritories
and
Palestine’s
legitimate
rights
are
reco(ynized’.1
The
OAPEC
nations
then
proceeded
to
implement
their
threat,
even
escalating
the
cuts
and
instituting
an
embargo
against
’unfriendly’
countries.
On
10
July
1974,
however,
the
OAPEC
embargo
of
Holland
(the
last
significant
remnant
of
the
policy
initiated
in
Octo-
ber)
was
lifted.
The
event
went
almost
unnoticed
in
a
world
still
reeling
from
the
repercussions
of
.crude
price
in-
creases,
oil
multinational
company
prof-
its,
and
economic
crises.
But
Israel
had
not
withdrawn
from
all
the
occupied
territories,
nor
had
the
Palestinian
prob-
lem
been
solved.
What
had
changed
in
the
Arab
use
of
petroleum
as
a
’wea-
pon’ ?2
,
Clearly,
the
Arab
states
coordinating
their
oil
policies
represented
a
wide
spectrum
of
political
persuasions,
from
Libyan
socialism
to
Saudi
Arabian
mon-
archism.
Then
too,
cuts
in
oil
produc-
tion
could
hurt
Arab
friend
as
well
as
Arab
foe.
Finally,
the
oil
weapon
was
not
without
limitations.
It
would
be
an
oversimplification
to
see
oil
production
cuts
and
price
rises
in
terms
of
a
single
coordinated
tightly-knit
’cartel’.
The
end
result
of
the
Arab
use
of
oil
was
not
achieved
through
a
deliberately
calcu-
lated
strategy;
it
was
rather
the
outcome
of
intra-Arab
diplomacy
on
the
one
hand,
and
of
a
simultaneous
wider
OPEC
in-
terest
in
receiving
maximum
prices
for
crude
during
a
period
of
market
disrup-
tion
on
the
other.
But
before
discussing
the
more
interpretative
’how’
and
’why’
aspects
of
the
matter,
it
might
be
well
first
to
consider
briefly
exactly
what
hap-
pened
and
when.
I
Barely
two
days
after
the
commence-
ment
of
the
war,
on
8
October
1973,
an
OPEC
ministerial
committee
of
the
’Gulf
Six’
(Abu
Dhabi,
Iran,
Iraq,
Ku-
wait,
Qatar,
and
Saudi
Arabia)3
met
the
multinational
oil
corporations
in
Vi-
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