aup_oilcrisis.def 10-09-2004 11:52 Pagina 1 Hellema | Wiebes | Witte Hellema | Wiebes Duco Hellema | Cees Wiebes | Toby Witte The Netherlands The Netherlands played a remarkable role during the October War and the oil and the Oil Crisis crisis of 1973. In secret, even before the Nixon government began an airlift to Business as Usual Israel, the Dutch government had already sent a substantial amount of weaponry like ammunition and spare parts to Israel. Within the EC the Dutch government vetoed Duco Hellema | Cees Wiebes | Toby Witte a more pro-Arab policy. The Arab oil producing countries punished The Netherlands by imposing an oil embargo. T he Netherlands and the Oil Crisis The embargo seemed to threaten the Dutch position in the international oil sector. However, within two months it turned out that oil continued to flow to Rotterdam. The The Netherlands Dutch, therefore, rejected French plans for a more interventionist EC energy policy. Atlanticism and liberalism were the key words of the Dutch policy. It was business as usual. and the Oil Crisis This book is the result of intensive research in all relevant Dutch archives. The authors had free access to many still classified governmental and private files. The result is Business as Usual a surprising analysis of the oil crisis of 1973, and of the Dutch role in particular. Duco Hellema is professor of the History of International Relations at the University of Utrecht. Cees Wiebes is senior lecturer at the Political Science Department of the University of Amsterdam. Toby Witte is lecturer in Political Science at the Rotterdam Polytechnic. www.aup.nl A U P A U P The Netherlands and the Oil Crisis The Netherlands and the Oil Crisis Business as Usual Duco Hellema Cees Wiebes Toby Witte amsterdam university press The translation of this publication was funded by the Netherlands Organisation for Scientific Research (nwo). The Netherlands and the Oil Crisis: Business as Usual is a translation of Doelwit Rotterdam: Nederland en de oliecrisis, Den Haag: Sdu, 1998. English translation: Murray Pearson Cover illustration: © Freek van Arkel/Hollandse Hoogte Cover design: Sabine Mannel, n.a.p., Amsterdam Lay-out: Adriaan de Jonge, Amsterdam isbn 90 5356 485 3 nur 697 © Amsterdam University Press, Amsterdam 2004 All rights reserved. Without limiting the rights under copyright reserved above, no part of this book may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the written permission of both the copyright owner and the author of the book. Contents Foreword 9 1 War in the Middle East 13 The Netherlands and the Middle East 17 Support for Israel 18 Military Support 22 Arms Deliveries 27 Foreign Ministry Denial 31 European Political Cooperation 35 Conclusion 38 2 Difficulties 41 Turf War in The Hague 47 The First Signs 50 The Oil Weapon Brought to Bear 52 Nationalization in Iraq 55 A New Government Statement 56 The Embargo Spreads 58 The De Lavalette Mission 63 The Second Chamber 66 klm 68 Conclusion 71 3 European Divisions 73 The Netherlands and European Integration 74 France 77 Great Britain 79 The Neighbouring ec Countries 81 5 The oecd 83 The ec 84 A Declaration by the Nine 88 Reactions in The Netherlands 92 Conclusion 95 4 Domestic Measures 97 The Den Uyl Cabinet 97 The Importance of Oil 98 Uncertainty 100 Reducing consumption 103 The First Car-Free Sunday 107 Shell Helps 109 The Co-ordination Group 114 Conclusion 115 5 A European Summit 117 The Embargo 117 The Van Roijen Mission 120 An Incident in The Hague 123 The European Community 126 Two Oil Ministers in Europe 131 American Support 134 Divisions within the ec 137 Den Uyl and Van der Stoel 140 Visible or Invisible 144 Copenhagen 150 Conclusion 153 6 Rationing 157 Car-Free Sundays 158 Estimates 160 Export Restrictions 165 Preparations for Rationing 170 The Enabling Act 174 Doubt and Postponement 177 The Cabinet Ploughs on 179 Three Weeks Rationing 181 Conclusion 188 6 7 From Copenhagen to Washington 191 American Leadership 191 Production Limits and Oil Prices 193 The Embargo 195 Oil for Arms 200 An Invitation from Nixon 205 French Obstruction 209 Deliberations in European Political Cooperation 212 The Washington Conference 214 Conclusion 218 8 Sweating it out 221 A Second Letter to King Feisal 222 The Lifting of the Embargo against the usa 225 Plans for a United Nations Conference 227 The Sequel to Washington 231 The Euro-Arab Dialogue 232 The Supply Recovers 236 ‘Sweating it out’ 237 The Special General Assembly 241 Saudi Arabia Stands Firm 245 To the End 248 The Energy Co-ordination Group 249 Conclusion 251 Conclusion 255 Notes 265 Archival Records 297 List of Acronyms and Terms 301 Bibliography 304 Index of Names 313 Index of Subjects 316 7 Foreword October 2003 marked the 30th anniversary of the Arab oil embargo levied against The Netherlands as a ‘punishment’ for its pro-Israeli stance in the October War. On October 6, 1973, Egyptian and Syrian troops attacked Israel in an attempt to regain the land occupied by Israel since 1967, and for several days the Israeli army had its back against the wall. In The Netherlands, the first reports of the war aroused great concern: Israel must be helped as in 1956 and in 1967. The Dutch government led by Prime Minister Joop den Uyl had been in power in The Netherlands since May 1973, a coalition consisting of, on the one hand, three progressive parties, the Dutch Labour Party (Partij van de Arbeid, PvdA) and two smaller parties: the progressive-liberal d’66 and the Radical Party (ppr), and on the other hand, the Catholic People’s Party (the Katholieke Volkspartij, kvp) and the protestant Anti- Revolutionary Party (arp). After the outbreak of the October War, the Den Uyl Cabinet left no doubt as to its pro-Israeli sympathies, making it clear in a governmental statement that it held Egypt and Syria responsible for initiating hostilities and for unilaterally violating the truce. In the Eu- ropean Community, too, The Netherlands took a more emphatically pro- Israeli stand than did other member states, so much so that for a while The Hague found itself isolated. Nor was this merely a matter of words. Under conditions of strict se- crecy, a considerable quantity of ammunitions and spare parts was sent to Israel, an extensive military operation in Dutch terms, which it has long been maintained was undertaken without the knowledge of the Cab- inet. This political and military support for Israel would subsequently be given as the reason for an oil embargo levied against The Netherlands. Yamani, the Saudi Minister responsible for oil matters, himself declared that this was the main motive for the embargo. 9 Yet the affair of the oil embargo was by no means merely a response to the help lent to Israel. The oil crisis was also part of, or rather an ex- pression of, an intense power struggle in the international oil sector. The radical Arab oil producers were intent on breaking down the traditional relations in this sector in which The Netherlands occupied an important position. It was the homeport of Shell, one of the largest of the oil multi- nationals. Furthermore, Rotterdam was a crucial switch-point in the whole circuit of the processing and distribution of oil in Western Europe. An embargo against The Netherlands seemed to affect half of North-West Europe. In various respects, the oil crisis was a first test case for the Den Uyl Cabinet, for it presented enormous problems, not only of foreign policy but also with regard to domestic and socio-economic affairs. In the arena of international politics, the oil crisis demanded that fundamental choic- es be made concerning relations between North and South, the Ameri- can-European relationship and relations within the European Communi- ty. The oil crisis had a huge influence on Dutch domestic politics. The Central Planning Bureau predicted a marked rise in unemployment, slackening economic growth, increased inflation and possibly great dam- age to the port of Rotterdam and Dutch business life. For on paper, as one newspaper wrote a few days after the announcement of the embargo, turning off the oil tap was nothing short of a national disaster. The Dutch public was confronted with the prospect of Sundays without cars, of petrol rationing and restrictions on the use of electricity. What above all prompted us to write this book was the fascinating and at the same time complex totality of the oil crisis. In addition to which, this crisis suddenly placed The Netherlands centre stage in the theatre of international politics. The oil embargo focused all eyes on The Hague. So far, relatively little has been written on the role of The Netherlands during the oil crisis. Several studies have appeared, but an extensive study cover- ing the whole range of different aspects has been lacking. More curious is the fact that no one has hitherto undertaken a thorough investigation of the archives of those ministries most involved in the oil crisis. Thanks to the Dutch Freedom of Information Act, we were allowed ample access to the most restricted records that had a bearing on the cri- sis; which is to say that those ministries closely involved in the crisis – For- eign Affairs and Economic Affairs – made their records freely available. Abroad too, specifically in the United States, we were granted access to relevant archival documents, often for the first time. 10 Naturally, a number of questions remain unanswered. On certain points the archives contain no information, such as, in the matter of secret weapons deliveries to Israel.