Lektürekurs : OIL POLITICS

Dozent : Ivo Hernandez

THE OIL CRISES OF 1973 and 1979tructure

Structure

Background knowledge
The Oil crisis 1973/ Oil as a weapon ?
The Oil crisis 1979

What time period are we talking about ?

U.S. getting off the Bretton Woods Accord
Depreciation of the U.S. Dollar
The Six-Day War
June 1967 : Israel taking control over the Sinai Peninsula, Gaza Strip, West Bank, Golan Heights
The Yom Kippur War
Egypt’s and Syria’s revenge
U.S. aid to Israel provokes Oil Embargo by OPEC
Consequences for Oil Consumers
Rising oil prices cause recession and unemployment
Saving oil, reassessing their dependence on Arab oil
Changing energy policies

Oil as a weapon ?
Economic and Political aims to achieve
modernization of the industry and the agriculture
direct contact to the governments
resolution of the Arab-Israeli conflict
The new strategy of geopolitical power
Creating alliances with the majority of oil-producing states
Put pressure on the international oil-market by reducing the production and embargos
Differentiate between friend, neutral partner and enemy
Fixing and increasing the oil prices
The oil weapon - a really effective instrument?
effective because of the closet attitude
avoiding of an pro-Israeli position for European states
benefits from the increased prices
No solution of the conflict
Insufficient precision (harming the enemy without destroying the friend)
The oil weapon stays in the shade of the bipolar structure

The 1979 energy crisis

The rising tension
January : Revolution in Iran, Shah leaves the country
Demonstrations disrupt Iranian energy sector.
36% rise of the spot prices of the Middle-East light crude
March : Iran resumes petroleum exports
Gasoline shortage/ World Oil glut
June : Phased oil price decontrol begins
Gradual 28 month of « old » price ceilings
Slower rate of increase of « new » oil price ceilings
June 26-28 : OPEC raises prices overage of 15 %
The « Crisis of Confidence »
November 4 : Iran takes western hostages
November 12 : Jimmy Carter orders cessation of Iranian imports to US
November 14 : Iran cancels all contracts with US oil companies
The diplomatical breakdown
A humiliation for the US : the parade of the blindfolded hostages
Carter tried intense diplomacy but failed
Operation Eagle Claw
Consequences
The broken relations between Iran and the USA had big impact on the world economy
Worlwide economy growth decreased from 4,7% in 1978 to reach 0,8% in 1982
US inflation rose from 7,6% in 1978 to 13,5% in 1980
Unemploment rose from 5,85% in 1978 to 9,7% in 1982