The OPEC oil price hike that came with the oil embargo of 1973 placed vast amounts of financial power at the disposal of the oil-producing states such as Saudi Arabia, Kuwait, and Abu Dhabi. We now know from British intelligence reports that the US was actively preparing to invade these countries in 1973 in order to restore the flow of oil and bring down oil prices. We also know that the Saudis agreed at that time, presumably under military pressure if not open threat from the US, to recycle all of their petrodollars through the New York investment banks.(20) The latter suddenly found themselves in command of massive funds for which they needed to find profitable outlets. The options within the US, given the depressed economic conditions and low rates of return in the mid-1970s, were not good. More profitable opportunities had to be sought out abroad. Governments seemed the safest bet because, as Walter Wriston, head of Citibank, famously put it, governments can’t move or disappear. And many governments in the developing world, hitherto starved of funds, were anxious enough to borrow. For this to occur required, however, open entry and reasonably secure conditions for lending. The New York investment banks looked to the US imperial tradition both to prise open new investment opportunities and to protect their foreign operations.
The United States government seriously contemplated using military force to seize oil fields in the Middle East during the Arab oil embargo 30 years ago, according to a declassified British government document made public on Thursday.
The top-secret document says that President Richard M. Nixon was prepared to act more aggressively than previously thought to secure America’s oil supply if the embargo, imposed by Arab nations in retaliation for America’s support for Israel in the 1973 Middle East war, did not end. In fact, the embargo was lifted in March 1974.
The declassified British memorandum said the United States considered launching airborne troops to seize oil fields in Saudi Arabia, Kuwait and Abu Dhabi, but only as a ”last resort.”
President Nixon’s defense secretary, James R. Schlesinger, delivered the warning to Lord Cromer, the British ambassador in Washington at the time. In the document, Lord Cromer was quoted as saying of Mr. Schlesinger, ”it was no longer obvious to him that the United States could not use force.”
The seizure of the oil fields was ”the possibility uppermost in American thinking when they refer to the use of force,” the memorandum said.
The potential for such a military action was taken so seriously by British intelligence services that a report was written listing the most likely scenarios for the use of American force in the Middle East and the consequences of each. The report, dated Dec. 12, 1973, was titled ”UK Eyes Alpha” and was sent to Prime Minister Edward Heath.