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Xerox University Microfilms 300 North Zeab Road Ann Arbor, Michigan 48106 75-28,859 ALI, Sk. Rustum, 1932- THE USE OF OIL AS A WEAPON OF DIPLOMACY: A CASE STUDY OF SAUDI ARABIA. The American University, Ph.D., 1975 Political Science, International law and relations Xerox University Microfilms,Ann Arbor, Michigan 48106 © COPYRIGHT BY Sk. RUSTUM ALI 1 9 7 5 ALL RIGHTS RESERVED THE USE OF OIL AS A WEAPON OF DIPLOMACY A CASE STUDY OF SAUDI ARABIA by Sk. Rustum Ali Submitted to the Faculty of the School of International Service of the American University in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in International Studies Signatures of Committee: Chairm Dean of the School Dat 1 9 7 5 The American University Washington, D . C . THE AMERICAN UNIVERSITY LIBRARY soys’ PREFACE This study seeks to analyze the use of oil by Saudi Arabia as a weapon of diplomacy in the settlement of the Arab- Israeli conflict within a framework that highlights the salient variables such as politics, economics, international relations, and diplomacy. Saudi Arabia wanted to use its oil as an instrument to bring pressure on the United States to moderate its pro-Israeli policy in the Middle East. The external need for Saudi oil resource was not sufficiently exploited politi­ cally until the beginning of the oil embargo in 1973. Till that time, despite the difficulty of separating economics from politics, the Arabs have tried to keep the two apart as much as possible, for fear of a possible economic loss. It is our hypothesis that oil, a depletable but replaceable commodity, cannot be used as a weapon of diplomacy in the long run. In the short run, its use as a diplomatic weapon in the settlement of the Arab-Israeli conflict has a limited scope. The hypothesis will be tested by examining the impact of the Arab pressure on the United States through the 1973-74 oil embargo for the settlement of the Arab-Israeli conflict and by studying the trend in the development of the alternative sources of energy. The increasing demand for oil in the developed as well as developing countries has caused oil to become the most important source of energy in the world. International oil is a multibillion dollar industry that affects, in varying degrees, the balance of payments of oil exporting and consuming countries. Because of the embargo of oil by Saudi Arabia and other Arab nations, oil has inevitably been enmeshed into international political and economic relations and diplomatic activity. The stated aim of this dissertation is to examine the relationship between oil and diplomacy through a case study of Saudi Arabia. It may be assumed that, while oil demand will grow in the following decades, further oil demand until the end of this century would depend significantly on techno­ logical developments in energy production and consumption. Energy resources are abundant. Given the technology and money to develop them, it can be visualized that by the end of the century the demand for oil will be sharply curtailed, thus depriving it of its present significance and of its role as a weapon of diplomacy. The answer to the alternative sources of oil is sought in energy production and consumption, curtailment or competition. This study evaluates the assumption that oil may cease to be a significant factor in international relations after further development of nuclear energy, syncrude, and syngas. On the basis of available data, it is established that the Western world will cut its energy demands mostly through self-help projects and it will not depend unnecessarily on sources of supply beyond its control. A plan for energy independence or interdependence, based in the first instance on American iii national interest, could make a vast difference to international relations in the next 30 years and serve as a step toward an eternal world use of energy for the benefit of mankind. Higher oil prices are forcing the energy consuming world, particularly the United States, to search for new sources of energy. Since lead time in energy development is long, planning for world energy independence can be comprehended in three overlapping decade-long time frames. Time frame 1: Between 1975-85 nuclear power will generate sufficient elec­ tricity by replacing oil and natural gas partially for other uses. Time frame 2: In 1985-95 syncrude and syngas developed from coal and other fossils will become an important energy. Time frame 3: During 1995-2005 solar energy will be utilized as an eternal source. The central aspects of Saudi Arabian foreign policy as they relate to oil diplomacy vis-a-vis the Arab-Palestinian- Israeli conflict are elaborated in this study. There are four fundamental principles of Saudi Arabian foreign policy: (1) to prevent radicalist and nationalist incursion in the Arabian Peninsula; (2) to insulate communism from spreading its influence in the peninsula; (3) to maintain friendly relations with the industrialized noncommunist world; and (4) to support Islamic movement to promote solidarity among Muslim countries. The first objective of the core of Saudi policy is designed to protect the Saudi monarchy against infiltration of radical nationalism into the kingdom. As an Arab nation it is impossible for Saudi Arabia to isolate itself from the tide of nationalistic and anti-Israeli sentiments in the region, which explains the reasons for the growing friendly relations of Saudi Arabia with Egypt, detente with Syria, and entente with the Palestine Liberation Organization (PLO). The second objective of Saudi foreign policy is to prevent the spread of communism in the peninsula. The atheism factor of communism is considered incompatible with Islam. The third principle of Saudi policy is to maintain friendship with the noncommunist industrialized nations. As a die-hard anticommunist nation Saudi Arabia cannot offend for security reasons the United States, the most powerful anticommunist country, and other noncommunist nations. Ideologically, Saudi Arabia has cast its lot with the anticommunist world of its own volition, and the desert kingdom intends to remain as such. Being pronouncedly anticommunist and underdeveloped, Saudi Arabia is dependent on the United States and other noncommunist nations for arms supplies and training, technology, and many other necessities of a developing nation, including vital supplies of foodstuffs. The fourth principle of Saudi foreign policy is to foster cohesiveness in the Muslim world. As the protector of the holy places of Islam, Saudi Arabia has assumed the role of a kind of spiritual leader of the Muslim world and, as such, wants to fulfill its resultant obligations to the Muslim nations. One such obligation is to liberate Jerusalem, the third holiest city of Islam, from Israeli occupation. Saudi Arabia has remained an insular country, isolated from the main current of world politics, ever since the founding of the Saudi monarchy in 1932. From this Utopian concept of insular living in the 20th century, the Saudi kingdom has been exposed to the whole world after its decision to use oil as an instrument of foreign policy in the resolution of the Arab-Israeli conflict. The Arab policy to maximize political and economic gains through oil began in 1959 when an Arab Oil Congress was formed. Gradually, politics per se and politics of oil became inseparable and indistinguishable in the inter-Arab and Arab-Israeli conflicts. The Arab military incapability coupled with the magnitude of the American support of Israeli war efforts forced Saudi Arabia to use its oil weapon in the Arab-Israeli war. This use of oil as a weapon and its restrictions are examined from two opposite points: First, too little use of the oil instrument by the largest exporter and biggest "reservist" of oil in the world invites trouble for the Saudis in the Arab world; and second, too great use of the oil weapon provokes antagonism against the desert kingdom from the outside world, especially the United States.