OPEC, the Petroleum Industry, and United States Energy Policy

By Arabinda Ghosh | Go to book overview

9
Strategy Against OPEC: Henry Kissinger and the Energy Crisis

1.

It is interesting and worthwhile to recount the role of former Secretary of State Henry Kissinger in confronting the OPEC threat because he played a very important part in formulating the strategy that was followed by the Nixon-Ford administration and by the Western allies. At the outset of the Arab oil embargo, Kissinger took an unusually hard line against OPEC, but he later talked about mutual accommodation and international cooperation. Then he suddenly threatened military intervention, which was followed by meetings with OPEC heads of states for a negotiated price of crude oil. This carrot-and-stick policy underscored the deep confusion, anger, and apparent frustration of the U.S. State Department and the Republican administration. Throughout his political life, Henry Kissinger had worked for the Metternich grand alliance: maintaining the world balance of power, with each power center confined to its own sphere of influence; and a tacit understanding among the big powers to put everything in its proper place. The oil crisis of October 1973 abruptly changed all that and shifted the geopolitical epicenter. Kissinger could not let that destroy his dream of a grand design.

At first, Kissinger reacted very strongly to OPEC's initial fourfold price increase of crude oil in October 1973, more strongly than any other Western statesman during the first stage of the crisis. He was the principal person in the final hours of the Nixon administration to visualize the potential calamity wrought on the world economy by the powerful oil cartel. He later convinced President Ford of the long-term implications of OPEC's actions. In the press, on TV, and in numerous conferences, he talked incessantly about the danger to Western civilization, the slow destruction of our way of life, and the impending depression of the world economy. To Kissinger, the Visigoths had arrived at the gates of imperial Rome.

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OPEC, the Petroleum Industry, and United States Energy Policy
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Figures ix
  • Tables xi
  • Preface xv
  • Abbreviations xvii
  • 1 - Introduction 3
  • Notes 16
  • 2 - The Emergence of Opec 17
  • Notes 35
  • 3 - The Pricing Mechanism of Opec 36
  • Notes 49
  • 4 - Opec and the Multinational Oil Companies 50
  • Notes 64
  • 5 - U.S. Oil Industry: Changing Structure and Performance 65
  • Notes 87
  • 6 - U.S. Oil Industry: Acquisition and Diversification 89
  • Notes 106
  • 7 - Petro-Dollars and Economic Change in OPEC Nations 107
  • Notes 132
  • 8 - Opec versus the Oil-Consuming World 133
  • Notes 148
  • 9 - Strategy against Opec: Henry Kissinger and the Energy Crisis 149
  • Notes 160
  • 10 - Facing the Energy Crisis: U.S. Policy under the Nixon-Ford Administration 161
  • Notes 174
  • 11 - Presidents Carter and Reagan and the National Energy Policy 176
  • Notes 187
  • 12 - The Future of Opec 188
  • Notes 197
  • Selected Bibliography 199
  • Index 203
  • About the Author 206
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