The artificial-seeming cities in Saudi Arabia that I have described in earlier chapters symbolized the transition from the Bedouin to the new life-style. They would be the homes not only of the new meritocracy but also of a depersonalized, detribalized proletariat all the more restless because it was not poor and was thus freed from the struggle for daily sustenance. America’s relationship had been on the whole with the world of the princes; they were good friends of our country; I saw no alternative to their rule that would not be worse for us. I wished them every success in their efforts to adapt themselves to the new challenges invoked by their own oil decisions, which accelerated the process of change and hastened an unpredictable future.
Yamani never so much as hinted at any of these dilemmas; he incarnated them even while probably rejecting them. Yamani performed his assignment brilliantly. But history may yet record that in helping to revolutionize the world economy he conjured up for his own society a monumental challenge of political evolution.
The immediate aftermath of the embargo found Saudi Arabia in a most uncomfortable position. It prized its friendship with the United States for emotional and practical reasons. It feared the tide of radicalism. Yet Arab solidarity corresponded to its moral convictions and to the security needs of the Kingdom. It could not afford isolation in the Arab world; it dreaded being an outcast, stigmatized as reactionary or accused of insufficient dedication to the Arab cause. The oil weapon had sharpened its dilemmas.
The result was a series of Saudi communications that, reflecting the various pulls on Saudi emotions, seemed to cancel each other out. On November 11, Yamani sent me a message expressly hedged by being described as “not official in nature.” (On the other hand, Saudi ministers do not send private messages to a Secretary of State unless they believe they have been authorized to do so.) It stated that “something” could be done about the embargo but only if the United States made a “statement regarding implementation of United Nations Security Council Resolution 242, and specifically, withdrawal from occupied Arab territories.” What Yamani wanted was a commitment to push Israel back to the 1967 borders; this the United States was in no position to give. On November 12 at a press conference in Peking, responding to a question about guarantees, I gave a much more general (and standard) answer, which accepted the principle of withdrawals but left the final lines to be determined by negotiation:
We have not yet given any particular guarantees. However, I would assume that if the peace negotiations succeed, there will be a very serious problem, especially for Israel, of how its security can be assured under conditions when the final borders will certainly be different from the cease-fire lines and when withdrawals are involved as Security Council Resolution 242 provides. . . .
In my reply to Yamani, making virtue out of necessity, I called his attention to these remarks.
On November 17 I received a somewhat different analysis: King Faisal was said to be unwilling to lift the embargo for only a few miles of Sinai desert. He insisted that a settlement include a denial of Israeli sovereignty over Jerusalem. Furthermore, any modification of the embargo would have to have the approval of Syria, Kuwait, Egypt, and Algeria. Concurrently, we were told that Yamani was being sent to visit other Arab capitals to test the waters, though he did not vouchsafe to us for what.
The next day, an aide to one of the senior princes conveyed yet another shade of Saudi intentions. Faisal’s insistence on Israel’s 1967 borders represented Saudi Arabia’s ultimate aims, we were told; it would not necessarily dictate Saudi oil policies. A modification of the embargo could take place as soon as there were “effective and tangible” moves toward peace, for example, a beginning of Israeli withdrawal from existing lines. The aide was not precise about whether that meant Egypt and Syria or Egypt alone.
That same day, November 18, the Arab oil ministers meeting in Vienna reiterated the linkage of oil to Mideast diplomacy. They announced that, in “appreciation” for the European Community stance on the Middle East, they were canceling the 5 percent production cutback scheduled for December. The Arab ministers thus “rewarded” the European Community only by maintaining a most difficult status quo; they did nothing to alleviate the two previous cuts that had caused the raging crisis. Moreover, the embargo against the Netherlands was continued and, what was more significant, accepted by the other states.
On November 19 Yamani informed us of the result of his inter-Arab consultations. He reverted to the hard-line position of linking the end of the embargo with Israeli agreement to “a timetable” for withdrawal from “all” occupied territories. It pleased Yamani to present this decision as a favor to the United States. It would give us “a stronger voice” in dealing with the Israelis to speed up their acceptance of a peace conference and withdrawal. We could never accept this. We had great sympathy for the difficulties of our friends in Saudi Arabia. But once we committed ourselves to impose political terms specified by others in return for oil, we would be on a slippery slope. Saudi Arabia would not be able to rest on its laurels. The radical states would press it to increase its demands. Sooner or later we would have to draw a line. The monarchy, in seeking to ease the pull of conflicting forces on it, would wind up trapped at some point between radical pressures and American resistance. It was better for us to resist before matters got out of hand. This was the essence of a message I sent to Prince Fahd on November 21 inviting him to Washington. I warned that it would be “very difficult for us to be as helpful as we would like in the negotiations ahead if we remain under the threat of a continuing oil boycott.” It was not the “act of friends”; it could lead to a confrontation incompatible with the “posture that we shall have to adopt if the negotiations are to have any chance of succeeding.”
To convince one’s opposite number of one’s determination in a test of nerves, it is sometimes useful to adopt a public position from which retreat would involve a loss of prestige. Therefore that same day I repeated in a press conference what we had so far told only the oil producers privately:
Those countries who are engaging in economic pressures against the United States should consider whether it is appropriate to engage in such steps while peace negotiations are being prepared, and, even more, while negotiations are being conducted. I would like to state for the United States Government that our course will not be influenced by such pressures, that we have stated our policy, that we have expressed our commitments, and that we will adhere to those and will not be pushed beyond this point by any pressures. . . .
Moreover, the United States would not simply passively endure blackmail. At a given point, retaliation was probable:
It is clear that if pressures continue unreasonably and indefinitely, then the United States will have to consider what countermeasures it may have to take. We would do this with enormous reluctance, and we are still hopeful that matters will not reach this point.
These were not empty threats. I ordered a number of studies from the key departments on countermeasures against Arab members of OPEC if the embargo continued. By the end of the month, several contingency studies had been completed.
Yamani reacted immediately. Showing that he had been stung, he gave an uncharacteristically intemperate television interview in Copenhagen on November 22. He threatened to cut oil production by 80 percent if the United States, Europe, or Japan retaliated. He warned that any American military action would be “suicide” because Arabs would blow up the oil fields. Noting that the United States was less dependent on Arab oil, he warned Europeans against joining in any American retaliatory policy since “your [Europe’s] whole economy will definitely collapse all of a sudden.”7 Carrying this theme around Europe, he and his traveling partner, Algerian Oil Minister Belaid Abdessalam, continued to leave open the possibility that Europe (except the Netherlands) and Japan would receive preferential treatment should they separate from the United States and adopt policies favorable to the Arab cause.
In Riyadh that day our new Ambassador — the oil expe
rt James Akins — met with Minister of State for Foreign Affairs Omar Saqqaf to urge a lifting of the embargo. Saqqaf repeated Yamani’s earlier line that the production cuts and embargoes were really designed to strengthen America’s hand in urging concessions on Israel; they were meant as a favor to us. Akins suggested that we might be mollified if oil deliveries to our Sixth Fleet were resumed and the next 5 percent production cut abandoned. By cable, I reminded Akins that our oil strategy was not based on “seeking partial relief”:
Our strategy is to make clear to Arabs that if they want our involvement in peace settlement efforts, they must first lift restrictions they have imposed rather than holding off on lifting restrictions until there is progress on settlement front. We want an end to interference with oil supplies for our Fleet, but beyond that we want a return to situation that existed before production cutbacks and embargoes were imposed, not just a suspension of further cuts and restrictions.
On November 25, Nixon delivered another major address outlining a detailed program of energy conservation. At the same time I learned through Haig that he was leaning toward the idea of sending a personal emissary to Riyadh to urge a lifting of the embargo and give assurances as to our conduct at the upcoming Geneva Conference. I was strongly opposed. Part of the reason, I suppose, was the normal reaction of a negotiator to an invasion of what he considers to be his area of responsibility. But it also clashed with our strategy. Sending a special emissary to trade concessions at Geneva for oil was hardly the best way to convey imperviousness to pressure, which was essential to the success of our policy. We would be looking like supplicants, while exposing Saudi Arabia to all the booby traps of the Arab-Israeli negotiations. I managed to dissuade the President. I explained my reasoning to my WSAG colleagues on November 29:
If we yield to the embargo in the sense of bargaining with the Saudis on the specific terms for the conference, we will get ourselves on a hopeless wicket. It would take too long. It would make the Saudis responsible for every point and they would be driven by their radicals. The British and French would be given an incentive to leapfrog. . . . They may have a monopoly on oil but we have a monopoly on political progress.
To make this equation stick was difficult enough within our government; our allies would have none of it. They continued on their course of dissociation. On November 22 Japan adopted a position similar to Europe’s of November 6. On November 28 an Arab summit in Algiers rewarded Japan by extending to it the same concession (canceling the next production cut) as the European Community had received on November 18. And in London, according to press accounts, Yamani assured Britain (and by implication others) that its pro-Arab stance would guarantee it oil supplies at the prewar level.
Meanwhile, the careful minuet with Saudi Arabia went on. It wanted to ease the embargo but do so with radical concurrence. This being impossible in the immediate future, Saudi Arabia struggled to reconcile the incompatible. And while the process was sometimes maddening to us, it was in fact conducted with considerable skill. Saudi Arabia navigated the shoals without catastrophe and eventually lifted the embargo without radical upheaval.
To set the stage the Kingdom sought to gain time. We were told on December 3 that Prince Fahd accepted the invitation to Washington. His goal would be to agree on the modalities for lifting the embargo and restoring the production cuts, to be announced during my visit to Riyadh scheduled for December 14. The only conditions would be prior assent from Sadat, Asad, and Boumedienne and implementation of the November six-point agreement in advance of the Geneva Conference. (This latter condition was already being met.) That same day I cabled Fahd that I was certain it would be possible to work something out, while Nixon sent a friendly letter to King Faisal stressing our two basic themes: If the embargo and production cutbacks were not suspended, American public opinion
will not permit us to play the sustained role which you and we agree is our responsibility. . . . An atmosphere of growing confrontation would only work to our mutual disadvantage and to the benefit of those who wish to maintain the status quo.
Nixon added a handwritten note pledging his total personal commitment to work for the full implementation of Security Council Resolutions 242 and 338.
But the next day, December 4, the Saudi Council of Ministers reversed the decision communicated to us only twenty-four hours earlier. Fahd would not come to America; the Kingdom did not wish to have the end of the embargo appear as a bilateral US–Saudi decision. The natural forum for implementing the program of December 3 — which was reaffirmed — would be at a meeting of Arab oil ministers in Kuwait on December 8. Prince Fahd would serve the common interest better by staying in the Middle East and working there for an end of the embargo and production cuts within the agreed framework.
December 5 brought yet another apparent hardening of the Arab position. Yamani and Abdessalam, the traveling oil ministers of Saudi Arabia and Algeria, called on me in Washington as part of their world tour of industrialized countries. Yamani reverted to the tough line. He said the embargo could be lifted and production restored to prewar levels only “according to a timetable which corresponds to the timetable of Israeli withdrawal.” In other words, the hint of December 3 — that the embargo would be lifted in connection with the Geneva Conference — no longer applied. This I rejected:
This is a question of principle. We have given our word to your King and other Arab leaders of our intention. Now, should we be blackmailed while we are in good faith trying to meet Arab aspirations?
A day later Yamani compounded the confusion. Seeing me alone, without the radical Algerian, he indicated that the formal position would be interpreted with great flexibility in practice. The embargo would be lifted if we achieved an Egyptian-Israeli disengagement in January as we planned.
This plethora of statements — tying oil decisions now to an Israeli pledge of total withdrawal, now to completion of one phase of disengagement, now to observance of the six-point plan, now to Syrian disengagement as well — was ended by the meeting of the Arab oil ministers in Kuwait on December 8. They came up with a communiqué that proved no one was willing to take on the radicals. The ministers linked the end of the embargo to Israeli acceptance of a “time schedule” for total withdrawal (including from Jerusalem) and the beginning of the actual relinquishment of territory. This was a clear nonstarter and the ministers knew it. They added yet another item of blackmail: The 5 percent production cuts deferred from December would be reimposed on nations who “don’t provide concrete evidence of friendliness such as by showing that they are putting pressure on the United States or Israel.”
We were determined not to accept specific conditions for a peace negotiation that had not yet even started, thus legitimizing continued Arab exactions if we failed to deliver rapidly enough. The Arab producers had put forward no other option. By the middle of December we were heading for a stalemate.
The Second Oil Shock: Tehran and Kuwait
THE Arab oil ministers had chosen their ground shrewdly. They emphasized the foreign policy issues most likely to exacerbate our differences with our allies. We insisted on moving at a pace reflecting our judgment of what was possible without crisis. Our allies had come to depend so much on uninterrupted economic growth that they were unwilling to run risks and they calculated those risks by the belligerent rhetoric of the radical Arabs. Still, whatever our disappointments with our allies, we continued to believe that the key to a long-term strategy was solidarity among the oil-consuming nations. This alone offered hope of transforming market conditions and restoring the balance of economic power. We also thought it essential to the political health of the democracies, racked by economic and social crisis, that they recapture control over their own destinies.
The European Community used the occasion of its Copenhagen summit on December 14–15, however, to reiterate and strengthen its November 6 declaration on Mideast policy — now in public opposition to the main thrust of our diplomacy. It was also decided to explore the
possibility of a regular “European-Arab dialogue,” the practical consequence of which could only be to institutionalize the Atlantic differences. The next months were characterized by our allies’ oscillation between cooperation with and dissociation from us and by their attempt to avoid the choice by pursuing both courses simultaneously.
We could slow down Europe’s rush to accommodation only by stressing our own imperviousness to pressure. I did my best to cultivate this impression during my trip to the Mideast in December to prepare for the Geneva Conference (see Chapter XVII). Everywhere I stressed the inadmissibility of continuing oil blackmail against the only country in a position to make progress toward peace and engaged in a major effort to do so. I warned my hosts not to count on our being swayed by European entreaties. Algerian President Boumedienne professed sympathy for the proposition that no self-respecting country could allow itself to be pressured; he said that he favored resuming full oil production in any event because of Algeria’s need for foreign exchange. Sadat promised that he would work for the removal of the oil embargo as soon as a disengagement accord on the Egyptian front was achieved. When I visited Riyadh on December 14, King Faisal seemed to agree to Sadat’s scenario and implied that production restrictions would be ended when the embargo was lifted.
Saudi signals were once more positive. On December 19 Saqqaf assured Ambassador Akins that the Arabs had made their point; the oil embargo must be lifted. Faisal’s view would be conveyed to the Arab oil ministers meeting shortly after the Geneva Conference, on December 25. Yamani was reported as expressing a similar opinion.
All the while, the economic consequences of the energy crisis worsened. Neither European appeasement of the Arabs nor my wanderings eased the economic impact of the production cutback or the psychological shock of the embargo. And then, within days of the hopeful encounter in Riyadh, an event occurred as unexpected as it was devastating: yet another doubling of the oil prices.
Years of Upheaval Page 130