Arab Oil as a Weapon

The episode cited by the British journalist dates back exactly fifty years. By 1973, thirteen years after its foundation, the Organization of the Petroleum Exporting Countries (OPEC) owned and controlled most international oil production and trade. Most of its power to determine output and price rested in the hands of its Arab members, as the Gulf states were then the mother lode of oil and gas extraction.

On October 6 of that year, amid the Cold War, Anwar el-Sadat’s Egypt and Hafez al-Assad’s Syria launched an offensive to recover some of their territories that Israel had occupied during the June 1967 war, namely Sinai and the Golan Heights.

In retaliation for President Richard Nixon’s decision to support Israel during its war against the Palestinians and the Arabs, the Arab OPEC states, including King Faisal’s Saudi Arabia, imposed an embargo on exports of crude oil to the United States and its allies.

In a meeting in Kuwait, on October 17, 1973, Arab OPEC members decided to block exports to Western states and reduce oil production by 5 percent a month until the Israelis withdrew from the occupied Arab territories. The price of a barrel of oil quadrupled. It was the first oil shock which led to heavy losses in Western economies.

In the United States, the increase in oil import prices had devastating effects on the overall economy. GNP fell by some $10 to $20 billion and half a million people lost their jobs in just six months, according to the American Treasury Department. The same department also noted that the OPEC embargo led to the swelling of the total US oil bill and hence significantly eroded the US balance of payments. In France, while in 1970 10 percent of export revenues were enough to pay the oil bill, by 1974 this had risen to 24 percent. Even though the OPEC embargo was lifted in March 1974, it left lasting economic damage in the United States and around the world.

Evidently, the Arab-Israeli War of October 1973 is different from the 2023 Gaza War. While the first pitted two regular armies against an occupying army, with strong allies supporting each side, this recent war is extremely asymmetrical, setting one of the most powerful and best-equipped armies in the world against the arms that Hamas’s resistance can muster.

In the first conflict, the camp of Arab countries had the support of the Arab oil nations. In the ongoing war, the civilian population of Gaza, 2.3 million before the launch of the Israeli genocidal attack, is left to its own devices, faced with indiscriminate bombings against residential areas, mosques, churches, hospitals, and United Nations schools.

In the fifty years between these two wars, the world has changed: wars and truces, invasions and withdrawals, peace treaties, normalization agreements, economic sanctions, the decline of several world powers and the rise of others. And the Gulf, too, has changed.

So, what are these transformations, and how do they prevent the Arabs of the Gulf from using their hydrocarbons to defend the Arabs of Gaza against the incessant Zionist massacres?

The New East-East Axis of World Oil

The first transformation occurred at the level of the oil market itself, as Adam Hanieh explains in his contribution to the collective book Dismantling Green Colonialism: Energy and Climate Justice in the Arab Region (Pluto, 2023).

The timeline drawn up by Hanieh covers the evolution of oil since its beginnings, but three main stages emerge from his analysis. The first is the wave of nationalization during the 1970s and 1980s, which allowed Gulf governments to assume direct control of upstream production, with national oil companies such as Saudi Aramco, the Abu Dhabi National Oil Company, and the Kuwait Petroleum Corporation taking over the exploration, extraction, and export of the Gulf’s oil supplies.

The second decisive stage began in the late 1990s, with China’s opening to the world economy and its subsequent positioning at the center of global manufacturing.

The third phase, which started in the 2010s, saw the confirmation of China as “the workshop of the world.” In 2019, about 45 percent of all the world’s oil exports were flowing to Asia — with more than half of these destined for China alone. “Most of these oil supplies originated in the Middle East, with the Gulf states and Iraq collectively providing almost half of China’s oil imports by 2020 (up from around one-third in 2001),” Hanieh explains, adding that this is a “pan-Asian trend” with around 70 percent of all crude oil exports from the Middle East (primarily from the Gulf) . . . currently destined for Asia.”

The United States, which was shaken during the oil crisis of 1973, has since become the world’s leading oil producer. The memory of the Texas oil fields that could not make up the difference fifty years ago was so bitter that the Americans searched diligently for new oil sources, in the Gulf of Mexico, the North Sea, and Alaska. Washington has also done everything to weaken OPEC’s grip on oil by undermining, through wars and sanctions, some of its most prominent members, including Iraq, Iran, Libya, and Venezuela.

According to a recent report by the US Energy Information Administration, “since 1977, the percentage shares of U.S. total petroleum and crude oil imports from OPEC countries have generally declined” and in 2022 the Saudi Arabia, the largest OPEC petroleum exporter to the United States, was the source of 7 percent of total US petroleum imports and 7 percent of US crude oil imports. Saudi Arabia is also the greatest source of US petroleum imports from Persian Gulf countries. About 52 percent of total US petroleum imports came from Canada.

Although the oil weapon may be ineffective against Washington, it could have dissuaded several European governments from their unconditional support for Israeli crimes in Gaza and the West Bank.

The European Union (EU) has found itself lacking reliable energy supplies since the outbreak of war in Ukraine in February 2022 and the ban on seaborne imports of Russian crude oil and gas. According to Eurostat figures, EU imports of crude oil from Saudi Arabia grew from 6.3 percent to 8.8 percent of trade in value between the second quarter of 2022 and the second quarter of 2023. In the same period, the Russian share of EU-imported gas shrank, while the Algerian share increased from 7.2 percent to 16.5 percent of trade in value. Both Saudi Arabia and Algeria are major Arab members of OPEC and their weight could have made a difference in the map of EU energy suppliers and its foreign policy towards Israel and Palestine.

Past Enemies, Future Allies

The second reason why the Saudi minister might have laughed is that Israel, which was a foe to Riyadh in the past, has now become a friend. While the Saudi king Faisal displayed his hatred towards Zionism, today senior officials and political leaders in the Gulf States see Israel as a strategic ally with whom they can exchange words of praise and friendly visits.

After sealing peace agreements with Egypt and Jordan in 1978 and 1994 respectively, in 2020 Benjamin Netanyahu’s far-right Zionist government concluded the so-called Abraham Accords with the United Arab Emirates (UAE), Bahrain, Morocco, and Sudan.

The Abraham Accords are a US-brokered normalization deal that also seeks to reinforce (already existing) normalizing relations with other Arab countries that are not officially part of the agreement, including those that have formal diplomatic ties with Israel, such as Egypt and Jordan, and those have not yet formalized their long-standing relations with Israel, such as Saudi Arabia and Oman.

Gulf states claim that they are not abandoning support for the Palestinians. The United Arab Emirates’ foreign minister explained, before signing the agreement in Washington on September 15, 2020, that:

This agreement will enable us to continue to stand by the Palestinian people and realize their hopes for an independent state within a stable and prosperous region. This agreement builds upon previous peace agreements signed by Arab nations with the State of Israel. The aim of all these treaties is to work towards stability and sustainable development.

Yet, contrary to the Emirati minister’s claims, the Abraham Accords — and other “eco-normalization” initiatives brokering deals with Israel on energy and water — have led to more repression against the Palestinians.

The Palestinian scholar Manal Shqair, in her chapter in Dismantling Green Colonialism dedicated to eco-normalization, analyzes the repercussions that such ongoing Arab-Israeli projects have on Palestinians — in the occupied West Bank, in the Gaza Strip, in the annexed Syrian Golan Heights, and even in the Palestinian territories colonized in 1948, where brutal apartheid is rife.

For Shqair, “no matter what forms the energy projects in the Mediterranean and Israel take, two important facts remain.” First, she links the violence and dehumanization endured by Palestinian fishermen and besieged people in Gaza to the highly militarized gas reservoirs that Israel controls in the Mediterranean and the projects linked to them, where Gulf petrodollars are a major asset. Second, she argues that the EU is once again showing its hypocrisy: by importing Israeli gas as part of efforts to hold Russia accountable for its invasion of Ukraine, European nations are blatantly treating Palestinian and Jawlani (i.e. Golan Heights) peoples as less human than Ukrainians.

Through their deals with Israel, the “normalizer” Arab states, like Egypt, Jordan, Bahrain, UAE and Morocco, “are now openly taking part in the systematic dehumanization of Palestinians and Syrians at the hands of both Zionists and European governments,” Shqair argues. Hence, “The dehumanization of the colonized, and the complicity of Arab states in this, are greenwashed by the EU and Israel as they collaborate in what is portrayed as a transition to a greener future and lower-carbon economy.”

The Saudi minister’s laughter was, some would say, just a laugh. But it is a bleak sign of the cynicism of the Gulf states and other Arab regimes, which continue to witness the Zionist massacre of the Palestinian Arabs with complicit, cowardly, and criminal indifference.