Case Five: The October 1973 War

As in the cases of the 1956 Suez Crisis and the 1967 Six-Day War, once again the Saudi regime was confronted with a war situation which posed a serious threat to its stability. The October 1973 War (or Yom Kippur War) broke out with a surprise attack by Egypt and Syria on Israel.248 The surprise attack was unleashed on two fronts. In the north the

248

The war was part of an ongoing conflict between the Arab countries and Israel. The root of the conflict is the creation of the state of Israel in historical Palestine. For a historian’s perspective on the conflict, see Ilan Pappe, A History of Modern Palestine (Cambridge: Cambridge University Press, 2004). The Saudis’ solidarity with the Palestinian cause is grounded in two principles, Islam and Arabism. These two principles lie at the heart of the Saudi identity. Islam renders cultural and geographical and linguistic borders irrelevant among Muslims, regrouping the disparate Muslim states as part of one community (umma). Therefore, the cause of the part is the cause of the whole. Moreover, Palestine is not just another Muslim country. Palestine is the home of the third holiest place in Islam, the Sacred Noble Sanctuary (Al-

Syrian troops attacked Israeli defense lines in the Golan Heights, whereas in the south the Egyptian troops advanced across the Suez Canal. In the initial days of the attack, Egypt and Syria benefited from the element of surprise. In the Sinai the Egyptian troops secured a position seven to ten kilometers east of the Canal. Similarly, Syrian attack inflicted heavy losses on the Israeli troops.

However, by October 9 the tide of war shifted in favor of Israel. On October 9-10 the Israeli armed forces managed to halt the advancement of the Egyptian troops in the Sinai. On the Golan front, Israel steadfastly responded to the Syrian attacks, and on October 10 Israel launched a major offensive attack against Syrian positions. To help ease the Israeli pressure on Syria, on October 14 the Egyptian Second and Third Armies launched a major offensive. Not only was the Egyptian offensive a complete failure, but Israel also went on the offensive. To make matters worse for the Arab armies, on October 13 the United States begun an airlift to re-supply Israel with arms. Moreover, on October 19, Congress approved 2.2 billion dollars worth of military assistance to Israel. On October 15, under the command of General Sharon, Israeli forces crossed the Canal with the intention of encircling the Egyptian Third Army.249 By October 20 Israel was clearly on the offensive, and a third Arab defeat was on the way.

The ominous outcome of the war and the American intervention on the side of Israel left Saudi Arabia in a vulnerable position. As Safran rightly concluded, the danger of the 1973 War presented the Saudi regime with two types of security concerns. A defeated Egypt could estrange President Sadat, turning Egypt away from the Western bloc toward the Soviet Union for military aid and political support. Such a scenario could lead to increase in the presence and influence of the Soviets in the region.250 Alternatively, Sadat might be ousted, and possibly replaced “by a leadership of unpredictable orientation or even by chaos.”251 Either way, a third Arab defeat, King Faisal reasoned, would endanger his dynasty.252 Moreover, in the wake of the United States military support to Israel, the position of the Saudi regime became more precarious. As an oil supplier to the United States, the regime was a prime target of angry public opinion at home and in neighboring Arab countries.

Aqsa Mosque and Dome of the Rock) or al-Haram al-Sharīf. Because of its Wahhabi tradition and custody of the two holiest places, Mecca and Medina, Saudi Arabia considers itself the center of the Muslim world and responsible for Islamic causes. Arabism also fuels Saudi support for the Palestinians. Because of historical unity and common culture and language, the Saudi society considers Palestine as an integral part of a larger Arab nation. Noble observes that, “The population of the area has a sense of Arab identity that transcends individual nationalities and encourages a sense of kinship.” See Paul C. Noble, “The Arab System: Opportunities, Constraints, and Pressures,” in Bahgat Korany and Ali E. Hillal Dessouki, eds., The Foreign Policies of Arab States (Colorado: Westview Press, 1984), 45.

249

Kenneth M. Pollack, Arabs at War: Military Effectiveness, 1948-1991 (University of Nebraska Press, 2007), 106-122.

250

After the Six-Day War, Israel became a regular recipient of American aid, while Egypt enlisted the help of the Soviet Union for arms transfer and military training. The Saudis were deeply concerned about the presence of the Soviet Military Mission in Egypt and feared that another devastating defeat would only increase the influence of the Soviet on Egypt.

251

Safran, Saudi Arabia: The Ceaseless Quest for Security, 154. 252

6.3.2 Responses: External Validation

The oil embargo of 1973 exemplified the usage of oil resources as an external security strategy. Withholding access to oil resources was transformed into a mechanism of punishing and rewarding individual countries in order to ensure domestic and regional stability. Once again the oil weapon was unleashed in response to the Arab-Israel conflict. Unlike the previous embargoes, the 1973 oil embargo was more sophisticated and influential. The genius of the 1973 oil measures lay in their discriminatory, flexible, and gradual approach. Oil-consuming countries were divided into four categories, but given the possibility of avoiding the boycott if a pro-Arab position was adopted. The categories were: most favored, preferred, neutral, and embargoed. The first category comprised countries that were allowed to import their full demand for Arab oil; the second category comprised countries that were allowed to import either the average of the first nine months of 1973 or an amount equal to the amount imported during September 1973; the third category comprised countries whose imports were reduced; the fourth category comprised countries whose supplies of Arab oil were fully discontinued, namely the United States and the Netherlands, but subsequently extended to include Portugal, South Africa, and Rhodesia.253 The gradual approach adopted by Saudi Arabia, within the Organization of Arab Petroleum Exporting Countries (OAPEC), reflected Saudi Arabia’s intention to pressure, not to completely break off with the United States. As table 26 shows, the cutbacks were gradual, turning the wheel of pressure on a monthly basis to punish “unfriendly” countries until they adopted a pro-Arab stand.

253

Table 26. The Arab Oil Embargo of 1973.

Date Events

17-Oct-73 Arab oil produces announced 5% monthly cutback of oil to the US and other pro-Israel nations, using previous month's figure as basis for cutbacks. 18-Oct-73 Saudi Arabia announced 10% cutback in oil production, threatening further

cutbacks if the US continues to support Israel.

20-Oct-73 Saudi Arabia decided to halt all oil exports to the US because of its support to Israel

23-Oct-73 Embargo was extended to the Netherlands 4-Nov-73

Arab producers increased the cutback in oil production to 25% below the September 1973 level. In actuality, Saudi Arabia's output reached 35% below the daily average of September.

18-Nov-73Arab producers canceled the 5% cutback for Western Europe, which was scheduled for December.

23-Nov-73 The embargo extended to Portugal, Rhodesia, South Africa

9-Dec-73Arab producers announced additional 5% cut in January for non-friendly countries

25-Dec-73Arab oil producers canceled January 5% cutback. Saudi Arabia announced 10% increase in output.

18-Mar-74 Arab oil producers ended the embargo to the United States

At the height of the embargo during the months of November and December, the Arab oil production was reduced by approximately 5 mbd. As shown in table 27, Saudi Arabia alone was responsible for the removal of more than 2 mbd in November.254 By December the international oil market had lost 4.4 mbd, bringing down the amount of oil available in the non-communist world from its October level of 50.8 mbd to 46.4 mbd. The consequences of the embargo threatened the economic growth of Western Europe and Japan. In the United States the situation was also socially and economically disturbing, due to the 40 percent jump in oil price and the emergence of “gas lines.” 255

254

After Saudi Arabia, Kuwait adopted the second largest cutback in oil exports. 255

Table 27. Saudi Arabia’s Output Change from September 1973 Level (1,000 b/d)

Year Month Volume Change Percentage Change

September 8532 - - October 7796 -736 -8.63 November 6267 -2265 -26.55 December 6614 -1918 -22.48 January 7513 -1019 -11.94 February 7796 -736 -8.63 March 8131 -401 -4.7 April 8654 122 1.43 May 9014 482 5.65 1974 1973

Source: EIA, Monthly Energy Review. Available, April 2009

In large part the panic was caused by surging oil prices, although the oil measures taken by the Arab producers did not directly target oil price but exports. As a consequence of the embargo and cutbacks, shortage and panic in the market affected oil prices: auctions were bidding up the price to an unprecedented level, and the gap between the spot price and the bid price quadrupled.256 The Saudis, however, were eager to demonstrate that the embargo and cutbacks were enacted to serve a political purpose, not economic gains. Their disapproval of the high prices was expressed by the Saudi Oil Minister, Ahmed Zaki Yamani. The high prices, in Yamani’s words, “reflect to a large extent the effects of the oil embargo and cutback measures taken by the Arab oil-producing countries, and since these measures are of a political nature, they should not have an economic effect.”257 The question of the new oil price led to a showdown between Teheran and Riyadh before a compromise was reached at a new spot price of around 12 dollars a barrel.258