Bixby High School - Spartan Yearbook (Bixby, OK)

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Embargo - -fl: , l Also vital to the success of the embargo Calthough not a party to itj was the earlier men- tioned price increase imposed by the OPEC. The adverse economic effects of the embargo on the producers were thus more than compensated for by higher prices: non-Arab producers were not particularly eager to fill the production gap feven if they were ablej because they were reap- ing fantastic incomes from the new price levels. The torrent of petrodollars - some S50 to S60 billion of annual oil revenues that the OPEC countries are unable to spend - is now flowing back to the oil consuming countries through a variety of other channels ranging from purchases of US Treasury notes and Canadian hydroelec- tric bonds to direct gov't-to-gov't loans, such as Saudi Arabia's recent S1 billion loan to japan Both Side S and Iran's S1 billion pre-payment to France for nuclear reactors. Arab governments are also len- ding directly to multinational corporations on acceptances from big banks. This vast rearrangement of international- payments flows raises several important problems: IJ While the oil funds will sooner or later come back to the major financial markets of the world, will they get channeled to those countries that need them in order to pay for their oil? 23 By shifting their large holdings of funds from place to place, can the OPEC countries play havoc with the world's financial and foreign-exchange markets? 35 As payment surpluses pile up year after year, will the OPEC countries own a substantial fraction of the world's assets by the end of the dec- , , D 1 ...... ,-, if ' ,'I, H ,Iix Y xxx . N u.'L- ll ll.. l 1 .gl .W l s ade? 41 By spending their vast new earnings, how much mischief Cintended or otherwise? can the OPEC countries do to the rest of the world and to each other? There is, on the part of the Arabs, a growing recognition of the danger inherrent in any threat to the stability of the West. Since the last oil embargo in the fall of '73, Western leaders have privately mulled the possi- bility of military intervention if the try to cut off the oil supply again the latter are wary. W Arabs - and

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V - - il A i I1 1 wi' J . Arab O11 The oil problem actually began during the Yom Kippur war, when the Arab states placed an embargo on oil sales to the Netherlands and the US. Perhaps greater than any other result, its success proved to the 12 members of the Organization of Petroleum Exporting Countries COPECJ - which includes such non-Arab states as Iran, Nigeria and Venezuela - that by acting together to restrict oil supplies, they had the oil consuming countries over a barrel. It now became evident that dependence of the major in- dustrial countries on imported oil was so great that, at least in the short run, they would stand still for paying much higher oil prices. Em- boldened, OPEC instituted the now notorious fourfold increase in crude oil prices on jan, 1 of '74. At one stroke this price increase gave a further fillip to worldwide inflationary pressures and reduced real incomes in all oil-consuming nations. For this reason, it introduced a strongly contractive force into the world economy - con- tributing to, if not causing, the current world recession. 1974 did see the end however, of the oil em- bargo and production cutbacks that had been imposed by the Organization of Arab Petroleum Exporting Countries 4OAPECl in October, 1973, in support of the Arab war effort against Israel. It also witnessed the establishment of a price for oil fS11.65fbarrel for 34 degree crude from the Gulf producersl believed to be impossibly high only a few months before. In the roughest terms, the twin crises of the embargo and the high oil price levels contain the seeds of inevitable con- frontation between a bloc of industrialized con- suming states led by the US, and a bloc of producing states largely, but not exclusively con- centrated in the Middle East and probably led by Saudi Arabia and Iran. The embargo, which was lifted on March 18, 1974, was a political act designed to pressure the major oil consumers Cmostly allies of the USB and the US itself Cas Israelis principal source of outside helpj through a total ban on the shipment of Arab oil to the US, the Netherlands, South Africa and Portugal, combined with production cut backs at SWZJ a month applied selectively to consumers accor- ding to their position with regard to the Arab- Iseaeli conflict. In December of '73, the produc- tion cutbacks were eased by holding them at 15'-711. Thinl y Veiled Threats From ,Tl 21 lk E aa, -f-'Wi- c or-or 'eef'eee a z-F-a--'M--- e . 1112 x Z 8

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1f-e'Tf - ggi, 'jg 'T . 1 f- tv -3, IA. 1 1 ' ' , ' kg-V. 1'-x',f, '.-' gf ?' I ' ' 'k f- Aa, .fi L.. if-g,.. H '-ff 'Z' -.x '2 . 1.2723-fi ' 55. i f . i 1 ' A' .,ff..'-? 'f ' - - 25' f Q LL 1 -- If ,-.5y'ti?11:- ' ,tweluxl -qs ' ' Y --'x ---A -- --'-.5 -, iv ,I 1- -'3':1,,wc. P' . . f f . - -ea.:-'f , , ,, '-- T, .ffl ' 5 r fp 'tif -.s X-,. - i E--, Foreign Affairs Commandant Of The United Sta tes Kissinger And The Mid-East Perspective: Success Or Stall? Synonomous with the arrival of Air Force Two in virtually any air- port in the world today is a short man with wavy hair, a German accent and a ready grin, Super K as he is sometimes called, perhaps the foremost figure in world events - United States Secretary of State Henry A. Kissinger. Under ex-president Nixon and now under Ford, Kissinger has established a reputation as perhaps one of the greatest statesmen and negotiators the world has ever known. He is largely responsible, through much jetting back and forth, for the truce, even if temporary, in the Mid- East: for the progression of detente with Russia as far as it has come: for dealings with the oil producing nations and assistance in their disputes: and indeed for global diplomacy wherever and whenever necessary - whether for the settling of differences or a trade agreement, it all seems to be part of a day's work for Kissinger. The Middle East has claimed a great deal of his attention this year, not only because of the powder-keg oil situation, but a multitude of inter- related factors which could at any moment lead to war. Visiting Amman in January of '75, Iran's Shah Mohammed Reza Pahlevi provided Jordan's King Hussein with a promise of increased financial aid to help turn Jordan into a prosperous and strongly developed country, as well as a squadron of F-5A fighters being phased out of the Iranian Air Force. The Iranian monarch then flew to Cairo, where his visit was described by one newspaper as probably the most important in modern Egyptian history. Egyptian President Anwar Sadat's warm reception of the Shah perhaps reflected a desire to put some of Iran's oil money to work shoring up Egypt's deficit-ridden economy, to which end the two leaders signed almost S1 billion in economic agreements, including a massive Iranian investment in Egyptian petrochemicals, which will provide needed fertilizer for both domestic use and export as well as plastics and synthetic fibers. Possibly beyond that too, Sadat saw an opportunity, through closer ties with Iran, to increase diplomatic pressure on Israel. For years Iran and Israel have been allies, yet the Shah's stance has changed dramatically since 1967, and he now regularly calls for complete Israeli withdrawal from occupied Arab territory. The one issue the Iranians can perhaps help resolve is con- trol of the Abu Rudeis oil fields in the southwest Sinai, which Sadat in- sists must be returned to Egypt as part of the next Israeli withdrawal. The Shah, whose country supplies Israel with 40'ha of its oil, told Sadat that Iran would be willing to increase its oil shipments to Israel to make up the estimated 5 million tons of petroleum that the Israelis would lose from the Abu Rudeis fields annually. Sadat voiced no opposition to the proposal, which was obviously Kissinger in its origination. The Secretary of State met with Israeli Deputy Prime Minister Yigal Allon in Washington in january under somewhat of a cloud which implied that Kissinger felt the Israelis were stalling. Their diplomats however, insisted that jerusalem had made a serious offer which the Egyptians brushed aside without so much as a counter-proposal. They suggested that Kissinger fly back to Cairo and find out precisely what Sadat would concede in return for further Israeli withdrawals - the Secretary will not however, return to the Mid-East on what he considers another probing mission until he is carrying new Israeli proposals that represent what he regards as significant concessions.