FAISAL AND OIL Driving Toward a New World Order

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authority to aid Secretary of State Henry Kissinger in moving toward an interim agreement in the Middle East. He helped persuade the Syrians, for example, to agree to the disengagement pact with the Israelis on the Golan Heights. Acknowledging Faisal's role, Kissinger told TIME Correspondent Strobe Talbott: "The King is a sort of moral conscience for many Arab leaders. By having great religious stature, he can act as a kind of pure representative of Arab nationalism." And, Kissinger adds, "Faisal has been able to maneuver Saudi Arabia from being a conservative state into a political bellwether."

The New Reality of Arab Power

One of the causes of the West's woes is that for too long it underestimated the will and power of Faisal and other rulers of oil-producing nations to act together. The cries for higher prices had been rising for 15 years, first from the Venezuelans and Iranians, then from the radical Arab leaders of Libya, Algeria and Iraq. Faisal, a conservative and a longtime friend of the U.S., at first resisted—and then changed his mind because of U.S. political and military support of Israel.

For many frustrating months in 1973, the King, and his spokesmen, warned the U.S. that unless it forced Israel to withdraw from occupied Arab territories and settle the Palestinians' grievances, he would slow down oil production. The State Department thought that the threat was hollow; President Nixon warned on television that the Arabs risked losing their oil markets if they tried to act too tough.

The Arab-Israeli war of October 1973 moved the Arabs to impose a reduction in oil output—and do much more. Within ten days after the Egyptians and Syrians had attacked Israeli-occupied territory, the Arabs and Iranians in OPEC† —long derided in the West for their disunity—coalesced and raised prices from $1.99 to $3.44 per bbl. A few days after that, King Faisal led an even stronger move. Angered by the U.S. military resupplying of Israel, the Saudis and the other Arabs embargoed all oil shipments to the U.S. and started cutting production. Very quickly their output dropped 28%. When the West made no response, OPEC realized its own strength and kept right on raising prices through 1974.

This huge success gave new pride and political power to all the Arabs and brought King Faisal widespread respect in the Arab world, many of whose leaders had earlier scorned him as an unregenerate conservative. Suddenly the Arabs found themselves avidly courted by people who for long had condescended to them. The hotels of Riyadh, Dubai and Baghdad overflowed with Western businessmen hawking Idaho potatoes, cement plants, color television systems and gas-fired steel mills. The Middle East also became a magnet for Western bankers, each with his own creative plan for dispensing the Arabs' cash. Elite American universities, from Stanford to Chicago to Columbia, searched for Arab professors and added courses in Arabic history, culture, language, religion. Western governments vied with the Soviets over which side could sell the Arabs more—and more destructive—fighter jets, tanks and missiles.

So much foreign money washed into Arab oil-producing countries that ordinary statistics no longer made sense. Estimated gross national product per capita ran to $13,000 in Kuwait, $14,000 in Qatar and more than