You probably know more about the geopolitics of the oil industry than me, I just represent it as very junior counsel. Oops, did I say something bad about the client? I mean the virtuous purveyors of a necessary resource. But speaking purely speculatively, I can't imagine why big oil, the client excepted of course, should be the least bit unhappy if the Arabs raised prices. That not only allows for greater profits, since the client owns the wells, the oil, etc., but encourages more exploration at home and elsewhere, with the promise of future profits. Big oil -- big business -- is not a big fan of competition. Big oil is into ogliopoly. Legally where possible, of course. Big oil gets no benefit from lower oil prices.
Now, you may say that big oil isn't the only voice in the matter. True. But big oil is a very powerful voice, and it's not really clear that it was evident that anyone else who counted saw much of a downside to higher energy prices at the time. It did cause inflation, which investors don't like, but "investors" are a rather loose-knot group as opposed to specific industries. It turned out to be bad for US auto, but they didn't believe it at the time, and anyway they were too stupid too see the Japanese threat at all, which wasn't just about better milage but about higher quality. (See Halberstam's The Reckoning.) I drive a Toyota myself, having returned to that brand after driving a Chrysler.
As far as US strategic interests go, the US had no interest whatsoever in upsetting our friends in the oil states like our pal Saddam Hussein, then a useful tool, much less the Saudis, the Kuwaitis, etc. They might invade or arrange a coup over over nationalization (Mossadeq) or a real or imagined threat to the balance of terror in the region (the Gulf Wars), but not over higher prices.
I don't think our rulers are smart enough to look four decades ahead. Maybe the Japanese are, but the Americans don'ts ee beyond the next quarterly report or, if they are very far sighted, the next election cycle. If they were smart enough to try to throttle the economies of the Asia-pacific region at birth they would not have let the Japanese get so far out of hand -- and now the Chinese. And I don't think that the US can dictate terms like that to the Arab oil states (Go, form a cartel, raise your prices! we won't stop ytou!) even if it wanted to.
--- parthasarathy kalalesrinivasaranga <kalalepsarathy at gmail.com> wrote:
> I have not seen this film or did you suggest a film
> for a theme ? I am from
> India and have closely followed the oil and middle
> east politics for over
> four decades..
>
> Will someone tell me why the Arabs were allowed or
> tolerated when they
> raisaed the price of oil sharply in the seventies ?
> We, the so called
> leftists in the East thought it was a deliberate
> conspiracy by the west to
> destroy the budding developing economies. If it was
> so, they almost
> succeeded, as our development was delayed by four
> decades almost.
>
> The present price determination has no justification
> from the angle of any
> of the capitalist pricing theories. If oil prices
> and industrial products of
> the develpoped world are brought down in similar
> proprotion by an executive
> decision, then the world trade will enormously
> increase and bring benefit to
> all. I suspect it was an excecutive and not a market
> driven decision when
> the price of oil started raising in the first
> instantce.
>
> Infact we pleaded with the Arabs that their lot is
> with us and they should
> be charging descriminating prices for us in return
> for development
> cooperation with them. But they were all in the
> clutches of their "second
> son" then!
>
> k.s. parthasarathy, Bangalore, India.
> e mail: kalalepsarathy at gmail.com
>
> --
> kalalepsarathy
>
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