Giacomo Luciani, The Oil Companies and the Arab World (New York: St. Martin’s Press, 1984).
Yusif Sayigh, Arab Oil Policies in the 1970s (London: Croom Helm, 1983).
Abdulaziz al-Sowayegh, Arab Petro-Politics (New York: St. Martin’s Press, 1984).
David Howdon, ed., The Energy Crisis Ten Years After (London: Croom Helm, 1984).
Giacomo Luciani and Yusuf Sayigh present some challenging and diverse insights concerning the energy crises of the 1970s. Luciani analyzes how each major oil company was affected by the process of “vertical integration,” how consumers tried to adjust to “supply insecurity,” and finally how the producing countries have attempted to enhance their newly-asserted control over their resources. His underlying concern is the world oil industry’s future—will a more fragmented, unstable market persist or is a reintegration process likely to take place?
The key to the future of the world oil industry, whatever its structure, is Arab oil—because of its sheer magnitude and low production costs. Luciani assesses the majors’ attitudes toward the Arab world, and finds that corporate strategies vary widely, from participation in a range of hydrocarbon projects (in the hope of gaining or maintaining preferential access to the region’s resources) to an abandonment of the region. Most international companies are, in fact, pursuing multiple strategies. It is through some combination of association and collaboration between the companies and the Arab producing countries that Luciani sees an avenue for reintegration.
In his view, the world oil market will likely consist of one integrated segment and another dominated by spot markets, arms-length transactions and government-to-government deals. Those companies that remain aloof from the Arab region will be among the losers should a reintegrated market emerge, but they would have substantial advantages if a disintegrated, trading-oriented market continues to prevail.
Yusuf Sayigh’s Arab Oil Policies in the 1970s discusses the achievements and predicaments of Arab oil producers since the nationalizations in the early 1970s, and attempts to clarify how oil can be utilized as an engine of viable, autonomous development. He points out, for example, that the Arab governments have made fuller use of their natural gas reserves; flaring of gas has been reduced from 70 percent to 46 percent of production between 1973 and 1979.
While he accords their achievements due regard, Sayigh criticizes the Arab governments for their shortcomings. He indicates the persistent contradictions of the Arab economies: deceptively, high growth rates are not accompanied by transformations in economic, technological, social, and political infrastructures and capabilities; serious imbalances—between urban and rural areas, among economic sectors, and between classes—persist; and popular participation in decision-making is slight. Finally, Sayigh urges the Arab states to coordinate their policies and cooperate in undertaking research and training, seek integration of their oil industries, and create a common Arab market.
Al-Sowayegh and Howdon are disappointingly broad in their scope but narrow in their outlook. Al-Sowayegh “attempts to explain Arab oil policy and the use of oil as a political weapon to support Arab demands.” He reviews the salient features of the oil industry’s history and the growth of Arab “oil consciousness.” To that end, he cites resolutions, speeches, and declarations of individual Arab leaders, OAPEC, the Arab Petroleum Congress, and the Arab League. He also documents the shortcomings of early uses of the oil “weapon”—the many external obstacles as well as the divisions within the Arab world between radical and conservative forces. But he occasionally fails to distinguish between genuine commitments to the Palestinian cause and rhetorical exercises.
Al-Sowayegh’s assessment of oil politics since 1973 retains a questionable air of optimism, especially given the benefit of hindsight. On the other hand, considering the author's post as Assistant Deputy Minister for Foreign Information in Saudi Arabia, this stance is no surprise. He does not even attempt to discuss the future of the “oil weapon.” The transformations of the world oil market has reduced the political leverage of Arab oil to negligible proportions. Various Arab regimes have attempted to co-opt the Palestinian struggle and redefine it for their own needs. None of this finds mention in al-Sowayegh’s book. Nor does the outrageous silence that reigned in Arab capitals, including Riyadh, in the wake of Israel’s Lebanon invasion. One wonders whether a Saudi-US rapprochement, uncomplicated by the Palestinian conflict, is not the unstated dream and premise of this book.
The Energy Crisis Ten Years After is a collection of papers presented at the University of Surrey in April 1983 by a “group of leading international commentators…and major corporate figures.” Despite its impressive cast, the book shows that the lessons of the “energy crisis” have indeed not been learned. OPEC is treated in a most familiar way: as the root cause of all “evil” in the world of energy. Essays by Edith Penrose and Colin Robinson are more thoughtful and provide some interesting insights. A further exception is the final chapter, a transcript of a panel discussion between Ray Dafter (Financial Times), Robert Mabro (Oxford University), Walid Khadduri (Middle East Economic Survey), and Michael Parker (British National Coal Board). Although much too short, it highlights aspects of the contemporary political economy of oil—particularly the role of spot markets—in a way that one wishes the book had done.