60 As he set policy the free market interpretation of the energy crisis gave

60 as he set policy the free market interpretation of

This preview shows page 13 - 15 out of 30 pages.

60 As he set policy, the free market interpretation of the energy crisis gave him intellectual coordinates to which he was prepared to orient. The critique of OPEC as anti-liberal and the identification of high oil prices as a geopolitical and ideological threat were influ- ential in shaping his policy decisions because they made sense of the uncertain transformations he faced. The strategy first came to fruition during 1974 , first in the preparations of the Washington Energy Conference and then in policy towards the UN Emergency Fund and the IMF Oil Facility. A RATIONAL STRUCTURE OF PRICES” For Kissinger, one important challenge in early 1974 was the threat of economic disarray on relations with the more oil-dependent allies in Europe. 61 Actions by officials of those nations confirmed his concerns that OPEC’s “unilateralism” might lead to their own ruinous economic competition. Fearing that Western cohesion would antagonize the Arab members of OPEC, the nations of Western Europe and Japan blocked an official Declaration of Emergency in the OECD Oil Committee in November 1973 . The failure to pass the declaration, which would have brought into action an oil allocation system designed in the wake of the 1967 Arab oil embargo, irritated Kissinger, who was still dyspeptic over the NATO allies’ refusal to assist in the Israeli airlift. 62 Tensions within the alliance heightened as decision-makers realized that the price hikes would endure beyond 1973 . The world’s two largest oil companies, Exxon and Shell, attempted to put a break on prices in November by reducing their profit margins. Oil auctions by Tunisia, Nigeria, and Iran nonetheless garnered bids of up to $ 17 per barrel the following month. The oil consultant Walter Levy 59 . Herbert Stein, “Meeting with Shultz, Ash, and Stein,” 21 January 1974 , White House Special Files (hereafter WHSF), President’s Office Files (hereafter POF), box 93 , RNPL; “Draft Rome Remarks by Secretary Shultz,” January 1974 , BP, box B 86 , GFPL. 60 . See Scowcroft to Kissinger, 30 January 1974 , KSWWOF, box 12 , GFL. For the contrary argument, see Kissinger, White House Years (Boston, MA, 1979 ), 949 - 962 ; Dam and Shultz, Economic Policy , 179 - 98 . 61 . Thomas Robb, “The Power of Oil: Edward Heath, the ‘Year of Europe’ and the Anglo-American ‘Special Relationship,’” Contemporary British History 26 , no. 1 ( 2012 ): 73 - 96 ; Aure ´lie E ´ lisa Gfeller, Building a European Identity: France, the United States, and the Oil Shock, 1973 - 1974 (New York, 2012 ), 127 - 46 . 62 . Memorandum of Conversation, 20 November 1973 , FRUS, 1969 - 1976 , vol. 36 , Energy Crisis, 1969 - 1974 , eds. Linda Qaimmaqami and Edward C. Keefer (Washington: Government Printing Office, 2011 ), doc. 243 ; National Intelligence Estimate, 5 December 1973 , FRUS, 1969 - 1976 , vol. 36 , doc. 262 . 512 : d i p l o m a t i c h i s t o r y Downloaded from by Bora Laskin Law Library user on 06 September 2018
Image of page 13
found the scramble for oil at those auctions “extraordinary.” 63 In a briefing paper for Kissinger in January 1974 , Simon described the “senseless bidding up of the price” as “emotional.” 64 Kissinger’s main concern in early 1974 , undoubtedly, was to keep the Atlantic Alliance intact. “The industrial democracies could not permit themselves to
Image of page 14
Image of page 15

You've reached the end of your free preview.

Want to read all 30 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes