Economics and Trade • Oil and Geopolitics
The U.S. Backs Israel
After the initial shock of the offensive was over, Israel began a two-front counteroffensive that drove back both Egyptian and Syrian troops. The ensuing conflict was heavily influenced by the events of the Cold War, which was ongoing between the United States and the Soviet Union: The Soviet Union supplied Egypt and Syria with weapons, and the United States retaliated by sending $2 billion worth of arms and munitions to Israel. Fortified by the U.S. assistance, Israel succeeded in defending itself, and a cease-fire was signed in November. The conflict's repercussions, however, were just beginning to affect Western nations.
OPEC Imposes an Embargo
In retaliation for Western support of Israel, the Organization of Petroleum Exporting Countries (OPEC), a cartel made up of Middle Eastern states that desired control of the region's oil sales, declared an embargo on the United States and raised prices for Western European allies by 70%. In the United States, the embargo exacerbated an energy crisis that had been worsening throughout 1973. Gasoline prices soared to previously unimaginable levels, and cars waited in long lines at filling stations that were often out of fuel.
The oil embargo was lifted on March 18, 1974, but high gasoline prices and the energy crisis continued through the early 1980s. To a certain extent, the crisis had given oil-producing Arab states more power than previously thought possible. In order to achieve their goals, the members of OPEC could use their ability to affect the world's oil supply as a master bargaining chip.
Cleveland, William L. A History of the Modern Middle East. Boulder, CO: Westview Press, 1994; Hourani, Albert Habib. A History of the Arab Peoples. Cambridge, MA: Belknap Press of Harvard University Press, 2002; Robinson, Jeffrey. Yamani: The Inside Story. London: Simon & Schuster, 1988.
"Opec Oil Crisis." World History: The Modern Era, ABC-CLIO, 2019, worldhistory.abc-clio.com/Search/Display/309858. Accessed 19 Mar. 2019.
Entry ID: 2181011