The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

What was called the “Arab oil embargo” had two elements. The broader one was composed of the rolling production restraints that affected the entire market—the initial cutbacks, then the additional 5 percent each month. The second element was the total ban on export of oil, which was initially imposed on only two countries, the United States and the Netherlands, though subsequently extended to Portugal, South Africa, and Rhodesia. In a bizarre twist, the embargo also extended to United States military forces in the Eastern Hemisphere, including the Sixth Fleet, among whose de facto responsibilities was the protection of some of those states that were imposing the embargo. The oil companies may have thought that they carried out that particular cutoff with a “wink,” implying that the missing oil would be made up from other sources; but, if so, the wink was not seen in the Pentagon, where, in the midst of a major military crisis, which might involve American forces, the reaction was one of fury. Nor was it seen in the Congress, where an amendment was hurriedly passed making it a criminal act to discriminate against the Department of Defense. Meanwhile, supplies were resumed to the U.S. forces.