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GESIS - Leibniz Institute for the Social Sciences is collaborating with JSTOR to digitize,
preserve and extend access to Historical Social Research / Historische Sozialforschung
David S. Painter*
Abstract: »Öi und Geopolitik. Die Ölkrisen der 1970er Jahre und der Kalte
Krieg*. Examination of the geopolitics of oil in the 1970s provides important
insights into the nature and dynamics of the Cold War. Possession of ample
domestic oil supplies and the ability to ensure access to foreign oil reserves
were significant elements in the power position of the United States in its Cold
War competition with the Soviet Union. U.S. oil production peaked in 1970,
however, making the United States increasingly dependent on oil imports and
ending its ability to provide oil to its allies during supply interruptions. At the
same time, economic nationalism and war and revolution in the Middle East led
to disruptions in supply and sharp increases in oil prices in 1973-74 and again
in 1978-80. In contrast, the Soviet Union overtook the United States as the
world's leading oil producer in the 1970s, and the windfall from higher oil pric
es helped support Soviet military and economic power and involvement in the
Third World. The oil crises raised questions about the ability of the United
States to ensure access to Middle East oil, heightened concerns about the dan
gers of Western dependence on Third World resources, and fed fears that the
Soviet Union was winning the Cold War. Although the oil crises of 1970s ini
tially harmed the United States and its allies and contributed to the demise of
détente, they also set in motion changes that led to the end of the Cold War.
Keywords: Oil crisis, Cold War, Nixon, Kissinger, Carter, Brzezinski, 1970s, détente.
1. Introduction1
Although Henry Kissinger wrote in his memoirs that the energy crisis "altered
irrevocably the world as it has grown up in the postwar period," neither his
memoirs nor most studies of the 1970s examine the interaction of the decade's
oil crises and the course of the Cold War.2 Oil is mentioned only twice in the
Possession of ample domestic oil supplies and control over access to foreign oil
reserves have been significant, if often overlooked, elements in the power
position of the United States.5 One of the key features of the geopolitics of oil
in the twentieth century was that, with two exceptions - the United States and
the Soviet Union - none of the great powers possessed significant oil reserves
within their borders. The United States was the world's leading oil producer for
the first three-quarters of the century. U.S. oil fields accounted for slightly less
than two-thirds of world oil production in 1920, slightly more than two-thirds
in 1945, and 16.5 percent in 1973.6 In addition to a thriving domestic oil indus
try, five of the seven great oil corporations (the so-called Seven Sisters) that
Garthoff 1994; Westad 2005; Logevall and Preston 2008; Ferguson et al. 2010; Leffler and
Westad 2010. Sargent (2013) notes that most studies of the Cold War in the 1970s neglect
economic factors such as oil.
Yergin 1991; Vernon 1976; Schneider 1983; Venn 2002.
Painter 2012; Toprani 2012.
DeGolyer and MacNaughton 2005.
Known as the "Seven Sisters" because of their close ties and multiple joint ventures, they
included Standard Oil of New Jersey (Exxon), Socony (Mobil), Standard Oil of California
(Chevron), the Texas Company (Texaco), Gulf Oil, the British-owned Anglo-Iranian Oil Com
pany (after 1954 British Petroleum), and the Royal Dutch/Shell group, a 60 percent Dutch
and 40 percent British partnership. See Sampson 1975; Penrose 1968.
Painter 1986, 3-10; Randall 2005, 13-109.
McNeill and Painter 2009, 20-4.
McNeill 2000, 297-331 ; Podobnik 2006; Schneider, 1983, 520-2.
Oil's economic importance increased after World War II as the United States
intensified its embrace of patterns of socioeconomic organization premised on
high levels of oil use, and Western Europe and Japan made the transition from
coal to oil as their main source of energy. Between 1950 and 1972, total world
energy consumption increased 179 percent, much faster than population growth,
resulting in a doubling of per capita energy consumption. Oil accounted for much
of this increase, rising from 29 percent of world energy consumption in 1950 to
46 percent in 1972. By 1972, oil accounted for 45.6 percent of U.S. energy
consumption. Western Europe and Japan were even more dependent on oil,
nearly all of which was imported, to meet their energy needs. By 1972 oil ac
17 Lenczowski 1976, 60-7; on OAPEC, see Tétreault 1981 ; Cooper 2011, 143-8.
18 Foreign Relations of the United States (hereafter FRUS) 1969-76, 36, docs. 229, 244, 247,
251, 253, 255; Discussion between the Defence Secretary and the US Secretary of Defense, 7
November 1973, Cromer to Douglas-Home, 15 November 1973, both in United Kingdom,
Foreign and Commonwealth Office, Documents on British Policy Overseas, Series 3, Vol. 4:
The Year of Europe: America, Europe and the Energy Crisis, 1972-1974 (ProQuest, 2014); Minis
try of Defence to the Prime Minister, "Middle East," 28 November 1973, PREM 15/1768; "Note
by the Assessments Staff, Middle East: Possible Use of Force by the United States," 12 December
1973, PREM 15/1768, both in United Kingdom National Archives (UKNA).
19 Kissinger 1982, 880; Cooper 2011, 129-30; Robinson 1988, 100-2. On the exercises, see
FRUS 1969-76, 27, docs. 42,46.
20 "Note by the Assessments Staff, Middle East; Possible Use of Force by the United States," 12
Dec. 1973, PREM 15/1768; Hunt to the Prime Minister, "Middle East," 3 Jan. 1974, PREM
115/2153, both in UKNA. A study by the Congressional Research in summer 1975 came to
similar conclusions; Congressional Research Service 1975.
21 On the communicative aspects of the embargo, see the astute analysis by Graf 2012.
'Saudi Arabia Warns U.S.' 1973, 1; FRUS 1969-76, 36, doc. 255, note 2, cites a 10 January
1974 CIA review of possible military contingencies which concluded that military interven
tion to gain control of the oil fields would be counterproductive because it would probably
result in "destroying the very objective we seek." Kissinger and Schlesinger continued to
make veiled threats of intervention after the end of the embargo, and there were a number
of articles by conservative pundits calling for the United States to occupy Arabian oil fields.
See Congressional Research Service 1975; Buheiry 1980. See also Herbestreuth 2012.
FRUS 1969-76, 36, docs. 187, 193, 208.
FRUS 1969-76, 36, docs. 256, 261, 262.
FRUS 1969-76, 36: 762-64, 718-19, 731-35; Kissinger 1982, 896-7; Skeet 1988, 107; Gfeller
2012, 120-2.
Higher oil prices intensified the economic problems faced by the United States
and the other Western industrial countries in the 1970s, especially inflation,
which was now accompanied by stagnation and unemployment. The cost of
importing large amounts of more expensive oil also harmed the balance of
payments of the United States and other importing countries.30
Non-oil-producing developing countries were especially hit hard as they had
to pay higher prices for products from the developed countries as well as for oil
at the same time as demand for their exports dropped due to the global econom
ic downturn. Many of these countries borrowed large sums from Western banks
to cover their costs. Flush with petrodollars from the oil exporting countries,
the banks were eager to lend and offered low interest rates. Many countries
borrowed more than they could afford, a move that contributed to the Third
World debt crisis of the 1980s when the United States raised interest rates in
late 1979.31
In contrast, higher oil prices produced windfall earnings for the Soviet Un
ion. Between 1960 and 1973, Soviet oil production had almost tripled. As
production in Volga-Urals region plateaued, rich fields were found in the West
Siberian Basin, making Soviet oil reserves the largest in the world outside the
Persian Gulf. In the mid-1970s, the Soviet Union overtook the United States as
the world's leading oil producer.32 In addition to exporting oil to Western coun
tries, the Soviets supplied oil to Cuba and Vietnam at subsidized prices, and
sent oil as economic assistance to Afghanistan, Ethiopia, Mozambique, Nicara
gua, and South Yemen. During the 1970s, the Soviets increased oil exports to
hard currency markets. While the percentage of exports that went to the West
varied from year to year, Soviet hard-currency earnings from oil exports dou
bled in 1973 and again in 1974 and continued to increase for the rest of the
decade. By 1976, oil exports were responsible for half of the Soviet Union's
hard currency earnings.33
Smith 1993, 88-96. The total sales figures were higher, but many of the countries did not
pay their bills, resulting in a lower net gain.
Gustafson 1989; Allen 2001; see also the contribution in this HSR Special Issue by Perovic and
Krempin.
Although Iran technically gained full control of its oil industry in 1951, the oil settlement fol
lowing the 1953 coup effectively returned control to the international oil companies; see Painter
1986,197.
The first oil shock highlighted the West's dependence on Middle East oil.
Efforts to build up Iran to take over Great Britain's role as "guardian of the
Gulf' also demonstrated the interaction of the Cold War with concerns about
regional instability and Western access to Middle East oil. In addition, con
servative critics of détente sought to frame the October War 1973 Arab-Israeli
War as an attempt by the Soviets to expand their influence in the Middle East,
clearly connecting regional instability and oil with the Cold War.38
In mid-1969, the Nixon administration announced that the United States
would in the future refrain from sending U.S. troops to help countries facing
internal subversion but rather would provide them with "assistance in helping
them solve their own problems." Initially intended to reassure its Asian allies
that the United States would not abandon them while convincing the American
public and European allies that the United States would avoid future Vietnams,
Nixon and his national security advisor Henry Kissinger gradually expanded
the president's "informal and ambiguous" remarks into a more comprehensive
statement of policy that became known as the Nixon Doctrine.39
Despite its origins in Nixon's Vietnam strategy, the Nixon Doctrine had a
profound impact on U.S. policy in the Middle East. In early 1968, the British
informed the United States of their decision to withdraw their remaining mili
tary forces from the Persian Gulf by the end of 1971. Embroiled in an unpopu
lar war in Vietnam, the United States turned to Iran to take over as guardian of
the gulf. The shah was eager to accept, hoping to restore the power and prestige
of ancient Persia. Ignoring warnings from the U.S. military mission in Iran the
Nixon administration in mid-1972 decided to give the shah a "blank check" to
buy any U.S. weapons system short of nuclear weapons. For the other pillar of
its policy, the United States looked to Saudi Arabia, which eventually took on
the former U.S. role of maintaining spare production capacity that could be
used supply oil in an emergency and help moderate prices.40
The regional surrogate strategy was just underway when the 1973-74
OAPEC embargo and production cutbacks led to a quadrupling of oil prices.
Brzezinski to the President, Weekly Report #81, 2 Dec. 1978, Brzezinski Collection, Subject
File, Weekly Reports, 71-81; Brzezinski to the President, Weekly Report #83, 28 Dec. 1978,
Brzezinski Collection, Subject File, Weekly Reports, 82-90, both in Jimmy Carter Library; for
context, see Leffler 1983.
1 Brzezinski to the President, Weekly Report #84, 12 Jan. 1979, Brzezinski Collection, Subject
File, Weekly Reports 82-90, Carter Library; Special Coordinating Committee (SCC) Meeting,
11 February 1979, NLC-25-37-9-2-3, Carter Library; Carter 2010, 257, 261, 268; Sullivan
1981, 214-47; Huyser 1986; Afkhami 2009, 498-510.
1 Brzezinski to the Secretary of State and the Secretary of Defense, 19 Jan. 1979, Brzezinski
Collection, Subject File, Alpha Channel (Misc.) 4/78-4/79, Carter Library; Carter 2010, 272,
273, 288; Afkhami 2009, 511-21.
Yergin 1991, 684-91; Hakes 2008, 55-8.
Brzezinski 1983, 446; State Department/CIA study, "Regional Implications of Events in Iran,"
20 Feb. 1979, NLC-24-102-3-3-6, Carter Library; 'Arabian Anxieties' 1979, 2; Bronson 2006,
140-51.
Brzezinski to the President, NSC Weekly Report #31, 7 Oct. 1977; Military Assistant to
Brzezinski, Weekly Report, 22 Sept. 1977; US Central Intelligence Agency, The International
Energy Situation: Outlook to 1985, ER 77-10240 U, April 1977; CIA, Prospects for Soviet Oil
Production, ER 77-10270, April 1977; CIA, Prospects for Soviet Oil Production: A Supple
mental Analysis, July 1977; Bartlett and Steele 2003.
'CIA Chided on Soviet Oil Predictions' 1978, AI, 7; Stern 2013.
Policy Review Committee Meetings 21-22 June 1979, 23 June 1979, NLC-31-11-12-4-8;
Brzezinski to the President, Weekly Report #101, 22 June 1979, Brzezinski Collection, Sub
ject File, Weekly Reports 91-101; Brown, Memorandum for the President, 11 July 1979,
Brzezinski Collection, Subject File [Meetings-Vance/Brown/Brzezinski 8/79-9/79]; all in
Carter Library; Brzezinski 1983, 447.
1 Carter 1982, 254-5; Carter 2010, 329; Memorandum of Conversation, Fourth Plenary Meet
ing, 17 June 1979, Declassified Documents Reference System (DDRS) CK3100073527; Leffler
2007,315-8.
1 Gates 1996, 146-8; Westad 2005, 328; for the text of Brzezinski's remarks, which were
published in Le Nouvel Observateur [Paris] 15-21 Jan. 1998, see Gibbs 2000, 241-3.
CIA, "New Realities in the Middle East," NI MM 79-10026, December 1979, NLC-6-51-7-7-5,
Carter Library.
Jones 2006; Trofimov 2007.
Brzezinski to the President, 26 Dec. 1979, Brzezinski Collection, Geographic File, Southwest
Asia/Persian Gulf-Afghanistan [12/26/79-1/4/80], Carter Library.
1 "Soviet Union and Southwest Asia," attached to Turner, Memorandum for the President, 15
Jan. 1980, NLC-133-42-2-2-3, Carter Library; Westad 2005, 316-26; Leffler 2007, 303-11,
329-34.
At first glance, it appears that the oil crises of the 1970s hurt the United States
and its allies and strengthened the Soviet Union. In longer perspective, howev
er, a different story emerges. Over time, higher oil prices led to increases in oil
supply, decreases in demand, and a drastic drop in oil prices. These changes in
the world oil economy played an important role in the end of the Cold War.
After the first oil shock in 1973-74, the OECD nations launched a coordinated
campaign to protect themselves from future disruptions in supply. The campaign
focused on reducing oil consumption through greater efficiency and conservation,
replacing oil with other energy sources, particularly in electricity generation, and
reducing oil imports from OPEC producers, especially those in the Middle East,
by increasing oil production elsewhere. Although these efforts lagged due to
declining real prices for oil between 1974 and 1979, the second oil shock re
vived them. Between 1979 and 1985, oil consumption in the non-communist
world fell from 51.6 to 46.3 million bpd as a result of higher prices and reces
sions in 1973-1975 and 1979-1982. In addition, coal and natural gas replaced fuel
oil in many industrial and utility uses, and total use of nuclear power by the ad
vanced industrial countries more than doubled. Over the same period, non-OPEC
oil production, mainly in Great Britain, Norway, Mexico, and the United States,
increased from 17.7 to 22.6 million barrels per day, as higher prices and advances
in technology, especially in offshore production, spurred increased output. The
result was a 10.2 million bpd drop in demand for OPEC oil.66
Despite the disruption caused by the Iran-Iraq War, these changes in supply
and demand began to affect oil prices. After initially trying to support prices by
reducing output, the Saudi leadership decided in the summer of 1985 to regain
their position in world markets by increasing production. Rather than selling oil
at a fixed price, the price would be based on what refined products sold for in the
7. Conclusion
Oil was an important source of U.S. power and influence in the twentieth
tury. During the Cold War, U.S. policy focused on containing the Soviet
ion, ending destructive political, economic, and military competition among
core capitalist states, mitigating class conflict within the capitalist core
promoting economic growth, and retaining access to the raw materials,
kets, and labor of the periphery in an era of decolonization and national lib
tion. Control of oil was central to these efforts.70
The oil crises of the 1970s threatened U.S. control of world oil and thus U.S.
dominance in the international system. U.S. oil production peaked in 1970s,
making the United States increasingly dependent on oil imports and ending its
ability to provide oil to its allies during supply interruptions, a capacity that had
been an important source of U.S. influence. At the same time, economic na
tionalism, war and revolution in the Middle East, and the changing dynamics of
the Cold War raised questions about the ability of the United States to maintain
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