In October 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) curtailed oil production and embargoed oil shipments to those countries they perceived as sympathetic to Israel-the United States, Western Europe and Japan. In order to regain the needed oil, the OAPEC demanded a cessation of aid and support to Israel and a more active backing of the Arab cause. By the time the political crisis had subsided, the majority of the industrialized countries had not only censured Israel, but were actively courting the Arab countries to insure security of their future oil supplies. This was not the first time oil producers had attempted to use oil as a political or strategic weapon. Since the end of World War II, there have been at least three previous, albeit unsuccessful, efforts to influence other countries or multi-national companies using either the threat or the actual withholding of oil. This thesis examines the oil crises situations of Iran in 1951, the Suez Canal in 1956, and the embargo of 1967, in addition to the more recent oil crisis of 1973. The primary differences discovered between the 1973 situation and previous crises were: 1, In 1973, the Arab producers were able to act in concert to reduce oil production and to embargo. 2, They had a recognizable and mutually agreed upon objective. 3, The OAPEC had achieved a position of economic strength by 1973 and could afford to reduce their income from oil. without damage to their economies. 4, The other oil producers not participating in the 1973 curtailment and embargo could not make up the oil shortfalls caused by the OAPEC as had occurred in past oil crises. One of the major points to come out of this study was that there were two separate events occurring concurrently during the fall of 1973 and the spring of 1974. The first was discussed above-the political actions by the members of the OAPEC. The second was economic-the great increase in the price of oil by the Organization of Petroleum Exporting Countries (OPEC). The OPEC had been trying since 1960 to increase the price of oil with only moderate success, until 1973. The OPEC representatives were negotiating a price increase with the major oil companies in Vienna without much success when the fourth Arab-Israeli war broke out in October 1973. Shortly after the OAPEC announced the curtailments and embargo, the OPEC announced a doubling of the posted price per barrel of oil and by the time the political crisis had ended, the price of oil on the world market was four times the September 1973 price. The study concludes that oil as a strategic weapon is effective in coercing other countries to do one's will. It will continue to be effective so long as the industrialized nations depend on oil imported from irreplaceable sources like the OAPEC members.

ADA 057793 Approved for public release; Distribution is unlimited. The opinions and conclusions expressed herein are those of the student-authors and do not necessarily represent the views of the U.S. Army Command and General Staff College or any other governmental agency. (References to these studies should include the foregoing statement.)