bout de papier, Vol. 21, No. 4 (2005) — Winter 2005 // Hiver 2005, p. 6
THE NETHERLANDS AND THE OIL
CRISIS, by Duco Hellema, Cees Wiebes
and Toby Witte, Amsterdam: University of
Amsterdam, 2004, 320 pp., index. 49.50.
ISBN 90 5356 485 3.
This book is worth reading because it provides an excellent case study of non-state actors directly influencing foreign policy outcomes. As such, it serves as a primer on the intervention of non-state centres of influence on political outcomes. This book covers one example of what has and will constitute formidable factors in international relations.
The 1973 Middle East war led to an oil embargo directed primarily at the Netherlands though Denmark was also subjected to the embargo. The book recounts the events from a Dutch perspective and paints a dramatic picture of the efforts by the major oil multinationals to circumvent the oil embargo and, in the process, influence directly the outcome of international events.
The Netherlands and the Oil Crisis tells the story of the October 1973 war between Israel on one side and Egypt and Syria on the other. The Arab states, hoping to regain territory lost in earlier wars with Israel, launched the attack. The Netherlands was decidedly pro-Israel and under conditions of secrecy shipped a vast amount of ammunition and other military supplies to Israel, which was facing significant war-fighting shortfalls. Complicating this fact was the absence of full awareness of the Dutch Cabinet, including the Prime Minister, of direct Dutch involvement in the Middle East crisis.
The immediate impact of Dutch assistance to Israel was an embargo by the Middle East oil-producing countries on petroleum products destined to Holland.
Making the situation more difficult was the role of Rotterdam not only as the home-port of Shell, the Dutch-owned oil company, but also as a transhipment centre for much of the Middle East oil destined to the European Community members. The political and military support of Holland for Israel was cited by Arab states as the reason for the embargo. Whether it was the Arab intent or not, an embargo directed against the Netherlands would have immediate repercussions for the whole European Community.
One additional factor played a role in the embargo and the ultimate outcome of the crisis. An ardent power struggle was underway in the oil community. Radical Arab nations were intent on curbing the power and economic control exercised by the international oil conglomerate. International support for Israel, particularly by the Netherlands, could be cited as a convenient excuse to achieve the broader objective by the Arab oil producers to gain greater control of their raw resource, both for economic reasons and to use as a powerful political weapon.
Although the authors set out to provide a case study of the actions of the Dutch body politic on the nation’s Middle East policy, with its decided implications for domestic and European politics, the book, for the international reader, has the broader impact of recounting how the oil multinationals intervened to apportion more or less equal access to oil supplies by all the Western European states, clearly to the chagrin of the Arab oil suppliers.
The Middle East crisis highlighted the absence of a single European view of unfolding events in the relationship between Israel and its neighbours. France was conciliatory towards the Arab perspective and the other EU states were split in their support of the two points of view. While Dutch Cabinet members have made claims that they were unaware that military supplies were shipped to Israel, their political actions and vocal support for Israel at the time suggests, as the book underscores, that the action was neither a surprise nor one which would have been opposed. Indeed, the book suggests that the Dutch intervention could not have been carried out without the tacit knowledge of the Prime Minister and a number of other critical members of the Cabinet. At the back of the Dutch decision was always the presumption of American support and assistance if push came to shove.
The Arab oil producers were not unified in their stance on an embargo. For some, Iraq and possibly Algeria, it was a question of restructuring the power and property relationship in the international oil sector. For others, primarily Saudi Arabia, participation was possibly a means of curbing more radical options while ensuring implementation of price hikes which had been agreed upon by the Arab oil producers.
The oil multinationals, for their own reasons, did not want to isolate the Netherlands and chose to divide equally the oil shortage difficulties among all of Europe. European political efforts to reach agreement on handling the consequences of the oil shortages were unsuccessful in spite of a conference in Copenhagen to seek an accommodation. The efforts by the oil companies to ensure a minimal flow of oil to the European nations, in order to share the burden equally, could have come to naught if the individual nations had used legal means to hold the oil companies to their contracts. That did not happen.
A number of factors influenced the success of the oil multinationals in playing a significant role in the crisis. Oil supplies in Europe were high in anticipation of winter and an expected rise in prices. The export of processed oil products from Europe was reduced. Oil product consumption in Europe was reduced and the winter was milder than anticipated. The intervention of the oil companies ensured that supplies moved well and re-supplies arrived. There is evidence that the embargo was not being effectively enforced by the Arab oil exporters. Finally, earlier price increases had resulted in more flexible production limits before the crisis ran its full course.
Although the Dutch government did not have a full picture of the oil supply situation at the height of the crisis it was not for want of access to the information. The Dutch Foreign and Military Intelligence Services, through SIGINT, were regularly reading the encrypted supply reports of both Shell and Mobil, although the resultant analysis did not reach the Dutch Cabinet.
The Arab oil embargo against the Netherlands did not succeed. It failed because the oil companies united to spread the oil scarcity among the Western European recipients. By controlling the shipments of oil, it is possible that oil reached Rotterdam from embargoing nations thanks to the intervention of the oil companies. By intervening in this manner, the oil companies directly influenced the outcome of the oil crisis in Europe.
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Originally published in bout de papier, Vol. 21, No. 4 (2005) — Winter 2005 // Hiver 2005, p. 6. Read the rest of this issue →
