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would lake over its oil industry and
run il independently. This may well
complicate the Iranian oil picture.
lran, lhough Moslem, is the only
non-Arab oil giant in the Middle
East.
It
is relatively free from the ef–
fects of the Arab-Israeli conflict. But
lhe Arab oil powers are not.
Few people realize how difficull it
is for Arab oil ministers to negotiale
wilh lhe industrial powers. Sorne
would like to use oil as a weapon
against Israel. This would mean, in
effect, denial of oil to the United
States, a financia! and military sup–
plier of Israel. The United States,
remember, finds itself in the con–
tradictory position of supplying
massive aid to Israel and increas–
ingly looking lo Arab oil for ils fue!
needs. Bul lhe stormy Middle East
si1ua1ion makes it difficult for all
parties lo come to agreeable settle–
menls.
By the mid- 1980's, many Middle
East nations are expecled to develop
their own expertise to manage, con–
trol and market oil through their
own national companies.
During this decade, lhe Arab na–
tions are expected to be earning
scores of
billions
-
please note,
bil–
lions
-
of dollars annually from oil
earnings. Jonn G. McLean of Conti–
nental Oil Company reporled that
by 1985, the oil producing countries
of the Middle East and Norlh Africa
could be collecting oil revenues al
the annual rate of $50 billion. In
five years, Saudi Arabia's reserves
could conceivably rise lo somewhere
belween $10 and $12 billion. This is
more than the U.S. gold reserves be–
hind the dollar. CJearly, the oil pro–
ducing nalions are emerging as
powerful forces in world trade and
finance.
What of the Future?
In the Light of the growing finan–
cia! clout of Middle Eastern nations,
Japan's and Europe's obvious oil
vulnerability, lhe increasing needs
of lhe United States, and lhe Soviet
Union's maneuverings and possible
18
needs, will Middle Eastern and
North African oil fiow unimpeded
in the 1970's and 1980's?
We asked that question in an ar–
ticle appearing in the August 1971
issue of
The
PLAIN
TRUTH entitled,
"Middle East Oil: Black Gold."
Since then, the oi l situation has not
necessarily changed for the better.
Three nations have nationalized
their oil. Algeria nationalized her
total oil industry in 1971. Libya na–
tionalized the fields ofBritish Petro–
leum in 1972. Earlier, in 1967, Iraq
nationalized the Rumaila oil fields.
One authority eslimates that within
ten years, all the oil properties in the
Middle East and North Africa will
be nationalized.
However, sorne oil-rich nations
presently want only parlicipatory
status. In late 1972, Weslem oil
companies announced a tentative
agreement with five Middle Eastem
nations (Saudi Arabia, Kuwait,
l raq, Qatar, Abu Dhabi) which
would give the Arab states a 51 per–
cent interest in oil operations (by
aboul 1982). These 5 nations to–
gelher account for sorne 30 percent
of all free-world oil production.
Nevertheless, the prospects of
overall stability in lhe Middle East
are still in question.
A Rand Corporation study dis–
cussed the difficulty in these terms,
"In dealing with the threat of black–
mail from the Middle East [that, of
course, is a Western point of view,
and nations in the Middle East
would not agree wilh that assess–
ment of their role], the counter–
threat of economic retaliation may
not be strong enough to impress
Middle Eastern rulers caught in the
irrationality of political passion."
We must not forget thal in 1956,
less than twenty years ago, two
Western European nations, Britain
and France, invaded Egypt. Not
long afterward, American troops
landed in Lebanon, and recently,
the Soviet Union armed Egypt and
sent in thousands of technicians and
paramilitary personnel. The point is,
harsh measures of one sort or an–
other are
not
out of the question.
Could Oil Spark World
Conflict?
Political events surrounding an oil
crisis such as a stoppage could lead
to frightening circumstances in–
volving many powerful nations. In
order to graphically portray this,
consider the following possible sce–
nario of the future:
Il is, let us say, November 1982.
Winter is coming on, and Europe
has increased fue! needs, added to
the normal , voracious needs of its
industry.
A federation of Middle Eastern
and North African nations, called
the United Arab Union, has been
involved in months of stormy hag–
gling over oil prices. A few oil pro–
ducing states (not in the union) such
as Saudi Arabia and Iran have still
not hammered out acceptable terms.
With billions of "petroleum dollars"
in reserves, these nations are not
concerned with hastily signing con–
tracts.
The United Arab Union considers
putting the squeeze on the few re–
maining foreign-owned oil com–
panies and their paying customers,
hoping to increase revenues to what
it feels is fair. The nations in the
federation are Egypt, Libya, Syria,
Sudan, Algeria, Yemen and Iraq.
Events, however, are soon to get out
of hand.
In Syria, guerrillas embark on a
program of their own. They blow up
the Tapline and other pipelines car–
rying oil. The Egyptian government ,
bowing to popular demand, closes
its supertanker pipeline from the
Red Sea to the Mediterranean .
Libya and Algeria, supplying a
good share of the oil needs of Ger–
many and France, shut down their
welis. Oil tlowing to Europe from
west of the Suez Canal is etfectively
halted.
More importantly, the Soviet
Union, seeing a resurgent Europe
PLAIN TRUTH May 1973