What's the incident in which Saudi King offered only dates and Arab tea to US delegates and told them we have been eating these and surviving for centuries but the US won't be able to survive without oil?

Do you see this tree? My parents and grandparents have lived for hundreds of years bearing fruit and we are ready to go back to tents and live like them. And we do away with oil. And if the strong ones, while you are at the forefront, continue to help our enemy against us.

Faisal bin Abdulaziz, addressing Henry Kissinger when he received him in his tent in the desert.

**1973 oil ban The first oil shock**

The oil crisis of 1973 or the first oil shock started on October 15, 1973, when members of the Organization of Arab Petroleum Exporting Countries (OPEC (composed of Arab countries OPEC members in addition to Egypt and Syria)) announced an oil embargo "to push Western countries to compel Israel to withdraw from the occupied Arab territories In the 1967 war "[1], OAPEC announced that it would stop oil supplies to the United States and other countries that support Israel in its conflict with Syria, Egypt and Iraq. At the same time, OPEC members agreed to use their influence on the mechanism of controlling oil prices around the world in order to raise oil prices, after the failure of negotiations with the major oil companies called the "Seven Sisters" earlier in the same month. Since most industrialized economies rely on crude oil, OPEC has been its primary supplier of oil. Because of the dramatic inflation during this period, the popular economic theory was to blame these price increases, as it suppressed economic activity. However, the causal relationship mentioned by this theory is often in question [2]. The target countries have responded with broad initiatives, most of which are permanent, to contain their future dependence on others. The 1973 oil crisis, along with the stock market crash (1973-1974), was considered the first event since the Great Depression, with continuous economic impacts [3].

**Oil export ban**

On October 16, 1973, OPEC decided to cut oil production, and imposed a ban on shipments of crude oil to the West, specifically the United States and the Netherlands, as the Netherlands supplied Israel with weapons and allowed the Americans to use Dutch airports to supply and support Israel. As a result, the market price of oil rose dramatically immediately, and with the global financial system already under pressure from the collapse of the Bretton Woods agreement, this led to a long series of stagnation and high inflation that persisted until the early 1980s, and high oil prices continued until 1986.

**Chronology edit **

January 1973 The stock market crash (1973-1974) began. August 1973 In preparation for the October war, Saudi King Faisal and Egyptian President Anwar Sadat meet in Riyadh in secret, and discussions to reach an agreement under which the Arabs use the "oil weapon" as part of the upcoming military conflict. September 15 The Organization of Petroleum Exporting Countries (OPEC) announces the start of negotiations, to increase prices and put an end to support for Israel, on the basis of the 1971 Tehran Agreement. October 6 Egypt and Syria attack Israel in the October War, and the fourth Arab-Israeli war began. October 10 OPEC negotiates with oil companies to review the 1971 Tehran agreement. October 12 The United States begins Operation Nickel Grass to provide weapons and supplies to Israel during the war via strategic air transport. October 16 Saudi Arabia, Iran, Algeria, Iraq, the United Arab Emirates, Kuwait, and Qatar announce the unilateral price hike of 17% to $ 3.65 per barrel, and the announcement of production cuts. October 17 OPEC ministers agree to use oil as a weapon to punish the West for supporting Israel in the Arab-Israeli war, and recommends a ban against pro-Israel states and a reduction in exports. October 19 President of the United States Richard Nixon asks Congress to approve $ 2.2 billion in urgent aid to Israel, Saudi Arabia, Libya and other Arab countries announcing a ban on oil exports to the United States. 23 - 28 October The Arab oil embargo extends to the Netherlands. November 5 Arab producers announce a 25% production cut, in addition to the threat of an additional 5% cut. November 23 Arab ban extends to Portugal, Rhodesia, and South Africa. November 27 US President Richard Nixon announces the Emergency Oil Distribution Act. December 9 Arab oil ministers agree to cut another 5% for unfriendly countries in January 1974. December 25, Arab oil ministers cancel the 5% production cut in January. The Saudi oil minister promises a 10% increase in OPEC production. January 7 OPEC decides to freeze prices until April 1. February 11, US Secretary of State Henry Kissinger unveils the independence project plan to make the United States energy independent. February 12 Arab-Israeli progress to disengage and discuss the oil strategy from the heads of state of Algeria, Egypt, Syria and Saudi Arabia. March 17 Arab oil ministers, with the exception of Libya, announce the end of the US embargo. December 1974 The end of the stock market crash (1973-1974).

**The immediate economic impact of the embargo**

the oil companies in their countries, most notably, the Kingdom of Saudi Arabia controlled the operation of Aramco, and other OPEC member states and followed suit. Meanwhile, chaos produced a shock in the West, in the United States, the retail price of a gallon of gasoline rose from an average of 38.5 cents in May 1973 to 55.1 cents in June 1974, and at the same time the New York Stock Exchange lost $ 97 billion in the value of its shares in Six weeks.

**Countries that have been banned**

The blockade was not uniform across Europe, while the Netherlands and nine other countries were completely banned due to their support for Israel, the UK and France continued to supply them almost without interruption (after they refused to allow America to use airports and to ban arms and supplies to both Arabs and Israelis), while Six other countries were subjected to only partial discounts. The UK is a traditional ally of Israel, the Harold Wilson government was in favor of the Israelis during the Six-Day War, but his successor, Ted Heath, reversed this policy in 1970, and called on Israel to withdraw to the pre-1967 borders. Members of the European Economic Community were unable to reach a policy Joint during the first month of the October war, and finally the group issued a statement on November 6, after the embargo and price hikes began, widely considered in favor of the Arab countries, this statement supports the French-British position in their stance on the war, OPEC as committed to lifting the blockade of all Economic group members European friendly. Higher prices in Europe were far greater than the impact of the embargo, particularly in the United Kingdom (as the ban contributed to a strike by miners causing the energy crisis during the 1973-74 winter season a major factor in government change). After a few months, the severity of the crisis receded, and the ban was lifted in March 1974 after negotiations at the Washington Oil Summit, but the effects of the energy crisis remained throughout the 1970s. Energy prices continued to increase in the following year, amid a weakening position of the dollar in global markets.

**Price controls and quotas**.

The crisis was exacerbated by the government's influence on prices in the United States, which sets the price of "old oil" (previously discovered) while allowing newly discovered oil to be sold at a higher price, the decision taken to encourage oil exploration, which created a state of scarcity and faced many Countries where long queues of cars stood in front of gas stations. In the United States, a system is established to obtain fuel based on the individual and even car numbers (the last number in the license plate) so that cars with a single number get fuel during the individual days, and the even number during the even days of the month, which does not apply to the 31st day of Some months. Some American states have used three colors for flags. It is a system used to indicate the availability of gasoline in service stations. The green flag indicates the availability of gasoline, the yellow flag indicates restriction and legalization of sales. The red flag indicates that there is no fuel, even if the service center is open so it will be for other services. .

**The search for fair alternatives**

The energy crisis led to increased interest in the field of renewable energy, stimulated research in solar and wind energy, as well as increased pressure to exploit North America from oil energy sources, and the West increased dependence on coal and nuclear energy, and this effect included increased interest in mass transportation. In Australia the heating fuel stopped, and the appropriate heating fuel was revised in the winter. A group of industrialized countries were energy exporters, so the effects of the oil crisis differed radically. Eastern Industrial Canada was suffering from the same problems as the United States, while oil-rich provinces thrived as money flowed to them. Generally, the oil embargo had a severe negative impact on the Canadian economy. , The economic downturn in the United States across the border easily and caused an increase in unemployment, and the recession hit Canada just as it did the United States despite the fuel reserves. The Soviet Union was also a source of oil, the Soviet economy has been stagnating for several years, and the increase in oil prices has had a beneficial effect. The increase in foreign exchange reserves allowed the import of grains and other food from abroad, increased production of consumer goods and the maintenance of military spending at traditional levels Some believe that the sudden increase in oil revenues during this period enabled the Soviet Union to remain for a period of time longer than expected. The Brazilian government has implemented a very large project called "Proalkol" (pro-alcohol) that would manufacture a mixture of ethanol to be used as fuel for cars. This project, which focuses on the production of ethanol from sugar cane, is still ongoing and reduced the country's needs to import oil, as well as the price has decreased benzene.

**Macroeconomic effects**

The 1973 oil crisis was a major factor in the shift of Japan's economy away from oil and energy-intensive industries, and of massive Japanese investment in industries such as electronics. The central banks of Western countries decided to cut interest rates sharply to encourage growth, and decided that they would not worry about inflation in the first place, and although this is the traditional recipe for macroeconomics at that time, it led to recession and surprised economists and central bankers, in the long term the effects of the ban remained Concrete.

**Effects on international relations**

The Cold War and Nixon administration policies also hit hard after the oil embargo, focusing on China and the Soviet Union. The oil embargo was announced almost just one month after the military coup of the right-wing wing in Chile led by General Augusto Pinochet in Chile in 1973. In addition, Western Europe and Japan began their shift from support for Israel to more support for Arab policies (and some are still in effect today), and this change has increased tension in the Western alliance system, for the United States, which imports only 12% of its oil needs from The Middle East (compared to 80% for the Europeans and more than 90% for Japan), remains firmly committed to supporting Israel. One year after the oil embargo was lifted in 1973, the Non-Aligned Movement bloc at the United Nations submitted a resolution demanding the creation of a "new international economic order" that regulates and talks about resources, trade, markets and a more equitable distribution of local populations and the development of southern countries and their support by countries The North, which exploits its wealth and potential.

**Military takeover justice **

British documents revealed that the United States considered using force to seize oil fields in the Middle East during the October 1973 war when Arab countries banned oil exports [4].