Oil and the Arab-Israeli Conflict, 1948-63
by Uri Bialer
New York: St. Martin's Press, 1999. 336 pp. $69.95.
Reviewed by Patrick Clawson
Middle East Quarterly
The subject of this misleadingly titled book is actually how Israel dealt with the effect on its economy of isolation from its Arab neighbors. Although David Ben Gurion believed that "the only sanctions which could defeat and break us are oil sanctions," their effect was not that dire, and the reasons why may surprise the reader. For one, the Arab boycott of Israel was extremely weak in its early years. Bialer, professor of international relations at Hebrew University, recounts Esso's decision to invest in Israel in 1949, with no concern about Arab retaliation; indeed, Esso's 1954 decision to leave Israel was because of excessive Israeli government regulation. He also digs up the little-known fact that Great Britain de facto guaranteed Israel's oil supplies until at least 1956, for political and commercial reasons alike (British firms had a dominant position in the local oil market and owned a large refinery at Haifa). Israel's main problem with this arrangement was the high price charged by British oil suppliers. Its solution was to buy about half its oil in the mid- 1950s from the Soviet Union, which was effectively locked out of world oil markets by the oligopoly of the major Western oil firms. In other words, in the mid-1950s, Israel was in large part a normal small country scheming how to avoid the grip of the Seven Sisters.
The picture changed entirely after the 1956 Suez campaign, when Arab nationalism overwhelmed all other factors. The U.S.S.R. cancelled its contract, the governments of oil-producing Arab states successfully pressured the major Western oil firms to refuse to deal with Israel, and Israel had to cultivate relations with Iran to guarantee its oil supply.
Related Topics: Arab-Israel conflict & diplomacy, History, Oil | Patrick Clawson | September 1999 MEQ
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