In every car and tractor, in every tank and plane—oil. Behind almost every lighted glass tower, giant industrial plant or little workshop, computer and moon rocket and television signal—oil. Behind fertilizers, drugs, chemicals, synthetic textiles and thousands of other products—the same substance that until recently was taken for granted as a seemingly inexhaustible and obedient treasure. Few noted the considerable historic irony that the world's most advanced civilizations depended for this treasure on countries generally considered weak, compliant and disunited. Now all that has changed, and the result has been a major economic and political dislocation throughout the world.
The change became dramatically apparent in 1974, a pivotal year that saw the decline of old powers, old alliances, old philosophies—and the rise of new ones. The West's belief in the inevitability of human progress and material growth was badly shaken as inflation spread oppressively across the world, several industrial societies tumbled into recession, and famine plagued a score of nations. There was a marked erosion in the wealth, might and cohesiveness of North America, Europe and Japan. In the developing world, 40 or more countries with few natural resources fell increasingly into destitution and dependency. Meanwhile, a handful of resource-rich nations gravely compounded the problems and challenged the vital interests of the rest of the world by skillfully wielding a most potent weapon: the power of oil.
The Swiftest Transfer of Money in History
United in history's most efficient cartel, these nations exploited modern civilization's dependence on oil. Their power came from the uniqueness of oil, an exhaustible and not quickly replaceable resource that has long been shamefully wasted by much of the world. Because oil is not usually found where it is most consumed, and demand for it is so great, it is the most widely traded commodity in world commerce as well as a highly volatile element in world politics.
Again and again, the cartel formed by the Organization of Petroleum Exporting Countries raised the price of oil until it reached unprecedented and numbing heights. The producing nations' "take" from a barrel of oil, less than $1 at the start of the decade, was lifted from $1.99 before the Arab-Israeli war 15 months ago to $3.44 at the end of 1973 to more than $10 at the end of 1974. The result is the greatest and swiftest transfer of wealth in all history: the 13 OPEC countries earned $112 billion from the rest of the world last year. Because they could not begin to spend it all, they ran up a payments surplus of $60 billion. This sudden shift of money shook the whole fragile structure of the international financial system, severely weakened the already troubled economies of the oil-importing nations and gave great new political strength to the exporters.
The beneficiaries of this transfer were a disparate group of oil-possessing Africans, Asians, Latin Americans and, most favored of all, Arabs, who provided two-thirds of the petroleum exports and have more than three-fifths of the proven petroleum reserves in the non-Communist world. One bleak, sparsely populated country is by far the world's greatest seller and reservoir of oil, and one dour, ascetic and shrewd man is its undisputed ruler. He was