DBWI: An Oil Shock in the 70's

[Redem]

OAPEC threatened to put an Embargo on all oil product to the United States because of the Yum Kipour war, WI they decided to do it?

[ArKhan]

Well I doubt that Carter would be re-elected. Carter just wasn't that good when it came to matters of energy. Of course that throws off the whole election cycle after wards. No Bush in 84, No Clinton in 88, etc.

[Blue Max]

How would this play out?

I mean, the Oil Crisis was a bluff because Mohammed Pahlavi would never agree to this kind of antagonism of the United States.

Don't forget that the Sunni-Shia split has paid large dividends in keeping Iran as a friendly government to the United States. One wonders what would have happened if the Fundamentalist Coup against Pahlavi was somehow successful. Suffice to say, this changes everything--there would be no supporting Pahlavi over Saddam Hussein's Iraq regime, and perhaps there would have been some incentive for frugality in Oil Supplies.

Let's face it, we've only just started considering pushing cars above 20 MPG. If Price made this prohibitive, we'd probably have moved away from Gasoline entirely by this point. Also, don't forget, high oil prices would help the Soviet Union stay afloat. The Soviet Union's Crisis of 1983 was hailed as a triumph of Carter's policies, in that it led to the country pulling out of Eastern Europe and being forced to cut down its armed forces. If Oil remained at these kinds of levels, the Soviet Union might still be alive today, instead of collapsing under Yuri Andropov.

[Masri]

Sure there was some economic saber rattling to but what do the Arabs really gain from following through with the threat? Carter's neutrality in the region worked out just fine for the Arab states. The only POD i could think of is if the US had remained more interventionist after Vietnam and tried to support Israel with supplies. Then maybe the embargo would go through. But as long as the US remains neutral I don't see the Arabs risking it. The Arab victory was pretty close and if the US hadn't maintained its neutrality the Arabs might not have been able to regain the Golan and Sinai much less the entire West Bank and Gaza Strip.

[ArKhan]

Originally Posted by Masri

Sure there was some economic saber rattling to but what do the Arabs really gain from following through with the threat? Carter's neutrality in the region worked out just fine for the Arab states. The only POD i could think of is if the US had remained more interventionist after Vietnam and tried to support Israel with supplies. Then maybe the embargo would go through. But as long as the US remains neutral I don't see the Arabs risking it. The Arab victory was pretty close and if the US hadn't maintained its neutrality the Arabs might not have been able to regain the Golan and Sinai much less the entire West Bank and Gaza Strip.

So really, the biggest changes would be in the middle east, and the United States. However, I'm forced to disagree with Blue Max. I don't really seeing this effecting the Soviets in any direct way.

[Blue Max]

Originally Posted by ArKhan

So really, the biggest changes would be in the middle east, and the United States. However, I'm forced to disagree with Blue Max. I don't really seeing this effecting the Soviets in any direct way.

Well, ArKhan--its about the weakness of the Soviet Economy. Oil Sales were the critical supply of hard currency for the country. If you raise the price of oil, you raise the profits of Soviet Refineries--and thereby extend the life of the Soviet Government.

In any case, a short term fluctuation would be helpful--but the real winner would be keeping Oil prices high. I think the Soviet Union could have lasted longer than 1983 if oil was truly as lucrative as economists predicted OPEC could make it.

[ArKhan]

Originally Posted by Blue Max

Well, ArKhan--its about the weakness of the Soviet Economy. Oil Sales were the critical supply of hard currency for the country. If you raise the price of oil, you raise the profits of Soviet Refineries--and thereby extend the life of the Soviet Government.

In any case, a short term fluctuation would be helpful--but the real winner would be keeping Oil prices high. I think the Soviet Union could have lasted longer than 1983 if oil was truly as lucrative as economists predicted OPEC could make it.

But wasn't most of the Soviet Oil being sold in to the rest of the East bloc, with the Middle eastern oil going West? I don't really think the east/west economy was as interconnected as you give it credit for. Even less so back then.

OOC: I do see the point you're making here Blue Max, but this is the sort of thing I'd expect someone from TTL to say.