U.S. Middle East Policy & Oil
by Mitchell Bard
In 1973, the Arab oil embargo dealt the U.S. economy a major
blow. This, combined with OPEC's subsequent price hikes and a growing American dependence on foreign
oil, triggered the recession in the early seventies. However, reliance
on foreign oil continues to increase.
In 1973, foreign oil accounted for 35 percent of total U.S. oil demand.
By 2010, the figure had risen to 63 percent, and Arab OPEC countries accounted in 2010 for 22 percent of U.S. imports (with non-Arab
countries Angola, Venezuela, Ecuador and Nigeria, the figure is 42 percent). Saudi
Arabia ranked number three andAlgeria (#6), Iraq (#7) and Kuwait (#13) were among the top 15 suppliers of petroleum products to the United
States in 2010. The Persian Gulf states alone supplied nearly 15 percent
of U.S. petroleum imports in 2010.(1)
Egypt's President Sadat persuaded the late Saudi
King Faisal to threaten to withhold oil from the West to exploit for
political advantage the growing dependence of the industrialized West
on Arab oil. The tactic was effective: Soon the major American oil
companies backed the Arab cause in public, and privately worked to
weaken U.S. support for Israel.(2)
According to a 1974 report of the Senate Foreign
Relations subcommittee on Multinational Corporations, the ARAMCO
consortium-Exxon, Mobil, Texaco and SOCAL-attempted to block America's
emergency airlift to Israel. During the war, the companies cooperated
closely with Saudi Arabia to deny oil and fuel to the U.S. Navy.(3)
On other occasions, the major oil firms have
advocated the positions of the Arab countries, particularly Saudi
Arabia. The major oil companies vigorously lobbied Congress on behalf
of the sale of F-15s in 1978 and AWACS aircraft in 1981. Together with
Saudi foreign agents, these corporations enlisted many other American
firms to lobby on the Saudis' behalf.(4) Saudi Arabia has a powerful lobby in the United States because
hundreds of America's largest corporations do billions of dollars
worth of business with the Kingdom. And each of these
corporations, Hoag Levins noted, had hundreds of subcontractors
and vendors equally dependent on maintaining the good graces of Muslim
leaders whose countries now collectively represent the single richest
market in the world.(5)
The Saudis often attack what they claim is the
excessive influence of Israel's supporters in the United States, but
investigative journalist Steve Emerson turned that claim upside down.
After detailing many of the ties between Saudi Arabia and U.S.
businesses, universities, lobbyists and former high-ranking government
officials, he concluded:
The breadth and scope of the petrodollar impact is
beyond any legal remedy. With so many corporations, institutions, and
individuals thirsting after-and receiving-oil money, petrodollar
influence is ubiquitous in American society. The result is the
appearance of widespread, spontaneous support for the policies of
Saudi Arabia and other Arab oil producers by American institutions
ranging from universities to the Congress. The proliferation of vested
ties has allowed special interests to be confused with national
Never before in American history has any foreign
economic power been as successful as Saudi Arabia in reaching and
cultivating powerful supporters all across the country. The Saudis
have discovered that one quintessential American weakness, the love of
money, and the petrodollar connection has become diffused throughout
the United States.(6)
The growing reliance on imported
oil has also made the U.S. economy even more vulnerable
to price jumps, as occurred in 1979, 1981, 1982,
1990, 2000, and 2005. Oil price increases have also
allowed Arab oil-producers to generate tremendous
revenues at the expense of American consumers. These
profits have subsidized large weapons purchases and
nonconventional weapons programs such as Iran's.
America's dependence on Arab oil has occasionally
raised the specter of a renewed attempt to blackmail the United States
to abandon its support for Israel. PLO chairman Yasir Arafat suggested
such a tactic, for example, in 1990:
When the North Sea oil dries up in 1991, the United
States will want to buy Arab petroleum. And when American oil fields
themselves run dry and oil consumption in the United States increases,
the American need for the Arabs will grow greater and greater.(7)
The good news for Americans is that the principal
suppliers of U.S. oil today are more reliable and better allies than
the Persian Gulf nations.
Sources: 1."US Imports by Country of Origin - Petroleum and Other Liquids",
US Energy Information Administration, (July 2010).
2. See Steven Emerson, The ARAMCO
Connection, The New Republic (May 19, 1982), pp. 11-16; Russell
Howe and Sarah Trott, The Power Peddlers, (NY: Doubleday, 1977), pp.
342-343; Anti-Defamation League, The U.S.-Saudi Relationship, (NY: ADL,
1980), p. 6.
3. Steven Emerson, The American House of
Saud, (NY: Franklin Watts, 1985), pp. 36-37; Steven Spiegel, The
Other Arab-Israeli Conflict, (IL: University of Chicago Press,
1985), pp. 258-59; Anthony Sampson, The Seven Sisters, (NY:
Viking Press, 1975), pp. 248-50; Hoag Levins, Arab Reach: The
Secret War Against Israel, (NY: Doubleday, 1983), p. 51.
4. Steven Emerson, The Petrodollar
Connection, The New Republic, (February 17, 1982), pp.
18-25; also Emerson, (85), pp. 177-213.
5. Levins, p. 19.
6. Emerson (85), p. 413.
7. Al-Musawwar, (January 19, 1990).