Largest Reserve

Of all the nations producing oil, the largest known reserve is held by Saudi Arabia. She has an estimated one hundred and fifty billion barrels, much larger than any other known. Some experts say it may actually be much larger than that. So it is to Saudi Arabia that many needy nations look as a main source of present and future oil supplies.

During most of 1973 Saudi Arabian oil production was over 8,000,000 barrels a day. By 1980, users hoped, her production would rise to about 20,000,000 barrels a day. Indeed, they feel it must rise that sharply if the oil requirements of the needy industrial nations are to be met.

At present, no other country appears able to increase oil production at such a rapid rate. Because of her huge reserves, the easy accessibility of the oil, and the fact that production could be greatly increased in a short time, Saudi Arabia is looked to as the one country that must “come through” in the next few years. No alternative source of such huge and available reserves is known at this time. As U.S. News & World Report states:

“Experts going down the list of alternatives to Saudi oil are gloomy. Canada, now America’s top supplier of crude oil, has reversed its long-standing export policy and has adopted a ‘home front first’ approach. Nigeria, another major supplier, is said to be peaking out, at least temporarily. So is Indonesia. Venezuela is finding new reserves expensive to develop.

“As for non-Arab [but Moslem] Iran, . . . authorities insist there is ‘not a chance’ that it can meet U.S. needs.”

So western Europe, Japan and North America find they must increasingly look to the oil of the Arab-Moslem world of the Middle East and North Africa, especially Saudi Arabia. That is the only area known that could supply the enormous quantities of oil that will be needed by all these nations in the years just ahead.

Changing Arab Mood

In past years, the Arab nations had been largely pro-Western, pro-American and anti-Communist. Particularly was this true of the governments of Kuwait and Saudi Arabia.

However, four wars have been fought in the Middle East since the formation of the State of Israel. In all that time, the United States has supported Israel. But that support has had its effect on the Arab world. In this regard, U.S. News & World Report noted:

“Arabs everywhere are puzzled and dismayed by the U.S. approach to Middle Eastern problems. Why, they ask, does the United States continue to antagonize a people who outnumber the Israelis by 40 to 1​—and who control the oil resources which the U.S. will need over the next decade?”

As a result, Arab regimes in recent years tended to lean more and more away from the United States. Even such formerly staunch pro-American Arab lands as Kuwait and Saudi Arabia experienced a gradual change in attitudes.

In recent years, warnings by Arab nations began to accumulate. They said that if Arab lands held by Israel were not returned there could be repercussions where it would hurt the most​—in the oil supply.

Particularly ominous were the warnings issued by Saudi Arabia’s King Faisal, long a friend of the United States. In 1973, over national television in the United States, he warned that before long he might be forced to change his policy of selling all the oil that the United States, western Europe and Japan needed. It might be used as a political weapon to pressure other nations. And of all Arab nations, the use of oil by Saudi Arabia in this way would hurt the most.

England’s Guardian said on September 15, just before the outbreak of war in the Middle East:

“It requires only one Arab regime, King Faisal’s, to make the oil weapon work. He, on his own, commands the economic means. But until recently, as America’s best friend in the Arab world, he lacked the political will. . . .

“Changing Faisal’s mind has been one of [Egyptian] President Sadat’s few indisputable achievements. . . .

“In April this year, the Saudi oil minister told the Americans that unless they changed their pro-Israel posture in the Middle East Saudi Arabia would not ‘significantly’ raise its output.

“Since then Faisal, not a man given to public criticism of his friends, has delivered more warnings.”

What was significant was that the Arab nations, and Saudi Arabia especially, did not have to cut all oil production to make their oil weapon work. Why? Because the oil needs of the oil-short nations keep growing rapidly. So merely keeping Arab oil production at the same level would soon result in hard times for the needy nations.

Even more of a shock to Western nations, and Japan, was the step taken by previously pro-Western Saudi Arabia, the largest of all Arab oil producers. She announced that her cut in production would be, not just 5 percent, but 10 percent!

“Some of the big producing states, notably those with sparsely populated desert territories like Saudi Arabia, Kuwait and Libya, have become more conservation-minded.

“These countries are already earning as much as they can reasonably spend from their current levels of oil production. Accordingly, they prefer to keep any additional oil in the ground where it would surely appreciate in value rather than pile up huge surpluses of unspent dollars subject to the ravages of devaluation and inflation.

“It is here, in the reluctance of the producers to produce as much as the markets want, except at a high political and economic price, that the crunch lies in the prospective world energy crisis.”