Arab oil embargo and production interruption during the Six-Day War (1967)

The 1967 Arab oil campaign combined national destination embargoes, production interruptions and labour action during and after the Six-Day War. Algeria, Iraq, Kuwait, Libya and Saudi Arabia restricted oil flows on different terms to punish governments believed to support Israel. The measures briefly disrupted Atlantic oil supply and freight markets, but they did not compel the United States, United Kingdom or West Germany to change policy.

Instruments and chronology

Arab oil ministers recommended withholding oil from states judged to have assisted Israel, but national governments and concession companies implemented the decision. Iraq, Libya, Kuwait, Saudi Arabia and Algeria did not impose one common legal instrument or timetable. Iraq maintained some restrictions after other producers had begun easing theirs. Libya resumed shipments discreetly during August. The Khartoum resolution of 1 September called for pumping to resume and for oil revenue to be used to support Arab states directly affected by the war. It did not prove that every national restriction ended on the same day.

The campaign contained 4 distinct transmission channels. Destination controls denied deliveries to named jurisdictions. Production shutdowns withdrew some volume from the market. Worker refusals affected loading and operations but were not identical to government orders. The closure of the Suez Canal lengthened tanker routes and tightened freight capacity, but Egypt's closure of the waterway was not an export sanction imposed by the producing states.

Effects and adaptation

The United States took little crude directly from Arab producers, while western Europe and Japan were much more exposed to system-wide disruption. International oil companies reallocated cargoes, refiners substituted grades and output outside the participating states helped rebalance the Atlantic market. These adjustments did not make the initial disruption negligible. They did prevent a destination embargo from producing sustained deprivation in the named targets.

Revenue dependence weakened sender cohesion. Withheld production reduced fiscal receipts while non-participating suppliers gained sales. National restrictions consequently eased on different schedules. The target governments did not make the demanded diplomatic concession.

Assessment

This is a main-sequence case of direct commodity statecraft because public authorities restricted access to a strategic resource for a declared foreign-policy purpose. It was not the first political use of oil, and it was not a simple rehearsal for 1973. The later campaign combined tighter producer coordination, graduated production cuts and a less forgiving market balance. Organisational change, concession politics and the 1973 war also shaped that result. The 1967 case instead shows the limits of destination controls when traded supply remains fungible, companies can reallocate cargoes and exporters need revenue.

See also

Arab oil embargo and production cuts (1973-1974) · Oil embargo · Energy weaponisation · OAPEC · Sanctions leakage

Sources

1. United States Department of State, Foreign Relations of the United States, 1964-1968, Volume XXI, document 26, 'United States Policy on Oil in the Near East', 27 December 1967.
2. United States Department of State, Foreign Relations of the United States, 1964-1968, Volume XXXIV, document 263.
3. League of Arab States, Khartoum Resolution, 1 September 1967.
4. Mohammed Suleiman Dajani Daoudi, 'The 1967 Oil Embargo Revisited', Journal of Palestine Studies 13, no. 2 (1984): 65-90.
5. Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (Simon & Schuster, 1991).
6. Roy Licklider, Political Power and the Arab Oil Weapon: The Experience of Five Industrial Nations (University of California Press, 1988).
7. Gary Clyde Hufbauer, Jeffrey J. Schott, Kimberly Ann Elliott and Barbara Oegg, Economic Sanctions Reconsidered, 3rd ed. (Peterson Institute for International Economics, 2007).
8. United States Department of State, Foreign Relations of the United States, 1969-1976, Volume XXXVI, document 8.
9. Organization of Arab Petroleum Exporting Countries, History.
10. Bruce Riedel, 'The 1967 War and the Oil Weapon', Brookings Institution, 5 June 2017.