by Rhoda Wilson, Expose News:
In 1973 the Bilderberg Group discussed the shift that was underway in the political, economic, strategic and power relationships between the oil-producing countries, the consumer countries and international oil companies.
Five months later the Arab oil embargo was announced throwing the world’s economy into the steepest economic contraction since the Great Depression.
Various commentators have suggested that this may not have been a coincidence and that the Bilderberg Group had orchestrated the 1973 oil crisis.
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In 2001, the former Minister of Petroleum and Mineral Resources of the Kingdom of Saudi Arabia, Sheikh Zaki Yamani, said he “is 100% sure that the Americans were behind the increase in the price of oil” back in 1973 and 1974. He adds that “they had borrowed a lot of money and they needed a high oil price to save them.”
Yamani contended that proof of his long-held belief was in the minutes of a secret meeting on a Swedish island, where UK and US officials determined to orchestrate a 400 per cent increase in the oil price.
Below, after giving a brief description of the 1973 Arab oil embargo and related events, we have copied extracts from the 1973 Bilderberg meeting Conference Report, which we assume to be the same as what Yamani described as “minutes of a secret meeting.”
1973 Arab Oil Embargo
The 1973 oil crisis was caused by an embargo by Arab oil-producing nations in response to US support for Israel during the Yom Kippur War. The Organisation of the Petroleum Exporting Countries (“OPEC”) approved the embargo on 19 October 1973.
OPEC demanded that foreign oil corporations increase prices and cede greater shares of revenue to their local subsidiaries, leading to a temporary cessation of oil shipments from the Middle East to the United States, the Netherlands, Portugal, Rhodesia, and South Africa.
The OPEC oil embargo quadrupled the price of oil in six months. Prices remained high even after the embargo ended.
The 1973 energy crisis and inflation that followed were caused by several factors, not just US support for Israel. There had been a decades-long struggle between the governments of oil-producing nations and the large US oil conglomerates for control over the global oil market.
Until the 1970s, OPEC, formed in 1960, had kept a relatively low profile, mainly negotiating with international oil companies for better terms for its member countries. OPEC saw the Yom Kippur War as a way to make its geopolitical power known and to strike a blow at the US oil giants.
The embargo caused the United States and Western European countries to reassess their dependence upon Middle Eastern oil and led to far-reaching changes in domestic energy policy, including increased domestic oil production in the United States and a greater emphasis on improving energy efficiency. In his book, ‘Confessions of an Economic Hitman‘, John Perkins mentioned the aftereffects of the embargo:
The embargo also resulted in significant attitude and policy changes. It convinced Wall Street and Washington that such an embargo could never again be tolerated. Protecting our oil supplies had always been a priority’; after 1973, it became an obsession. The embargo elevated Saudi Arabia’s status as a player in world politics and forced Washington to recognise the kingdom’s strategic importance to our own economy.
There seemed little doubt that the 1973 oil embargo – which had initially appeared to be so negative – would end up offering many unexpected gifts to the engineering and construction business, and would help to further pave the road to a global empire.
Confessions of an Economic Hitman, John Perkins, 2004
In 1979, the United States and Saudi Arabia negotiated the United States-Saudi Arabian Joint Commission on Economic Cooperation. They agreed to use US dollars for oil contracts. The US dollars would be recycled back to America through contracts with US companies. The Balance of Money noted that these companies would then improve Saudi infrastructure through technology transfer.
Bretton Woods International Monetary System
At the same time as the Arab oil embargo, the world economy was in recession, and the Bretton Woods international monetary system was formally ended in 1973.
The Bretton Woods international monetary system was established by delegates from 44 nations in July 1944 at the United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire. It established a system of fixed currency exchange rate using gold as the universal standard.
The agreement also facilitated the creation of the International Monetary Fund (“IMF”) and the International Bank for Reconstruction and Development (“IBRD”), which is known today as the World Bank.
Backing currency by the gold standard started to become a serious problem throughout the late 1960s. By 1971, the issue was so bad that US President Richard Nixon gave notification that the ability to convert the dollar to gold was being suspended “temporarily.” The move was inevitably the final straw for the system and the agreement that outlined it.
There were several attempts by representatives, financial leaders, and governmental bodies to revive the system and keep the currency exchange rate fixed. However, by 1973, nearly all major currencies had begun to float relatively toward one another, and the entire system eventually collapsed.
Because Bretton Woods and the fixed dollar went up in smoke, Lew Rockwell wrote, the IMF’s reason for existence evaporated. The big banks such as Chase Manhattan, Citicorp and the Bank of America took advantage of the situation and used the IMF, which was looking for something to justify its existence, to solve their problems.
1973 Bilderberg Meeting
The 1973 oil crisis and subsequent events were discussed with surprising accuracy five months earlier at a Bilderberg meeting. On its website, Public Intelligence has a copy of the Conference Report from the twenty-second Bilderberg Meeting held in Saltsjiibaden, Sweden, from 11 to 13 May 1973.
Under the chairmanship of H.R.H. The Prince of the Netherlands, there were 80 participants, drawn from a variety of fields: government and politics, universities, journalism, diplomacy, industry, transport, trade unions, the law, banking, foundation administration and military service. They came from thirteen Western European countries, the United States, Canada and various international organisations.
Among the participants were Gerrit Wagner, the CEO of Shell, and of the other oil majors: British Petroleum (BP), Total S.A., ENI, Exxon.
The first item on the agenda was to discuss two working papers that examined the guidelines of a common energy policy for the European Community and consider how the main energy-consuming countries might cooperate with one another. In the Conference Report, the two papers were titled ‘Guidelines for A European Energy Policy and Its Consequences on Relations Between Europe and North America’ and ‘An Atlantic-Japanese Energy Policy’. Below, we refer to these as Paper 1 and Paper 2 respectively.
The Papers
Paper 1’s author described why there was a fresh impetus for the European Community (“EC”) to have an energy policy: “The European Community, heavily dependent on the outside world for its energy supplies … The Commission’s main present concern – as its latest proposals showed – was the question of supplies.” The author then discussed suggestions to overcome energy supply problems and the mapping out of an energy policy.
The final section of his paper discussed the need for cooperation between the EC, USA and Japan:
Chief among [the reasons for cooperation] was the fact that the [European] Community, the US and Japan were all dependent, at least in the medium term, on other countries for their energy supplies, with all the economic, political and security problems that this implied. [pg.17]
The European Community had already made it known unofficially that it favoured energy cooperation with the US and Japan, primarily to eliminate futile outbidding between the importer countries for supplies, especially from the Middle East. [pg.17]
Finally, energy cooperation should fit into a context of more general consultations covering monetary matters, world trade and certain aspects of foreign policy. These general consultations between the Community, the US and Japan were an ambitious undertaking, in which energy consultations – because of their urgency and the apparent widespread agreement thereon – could constitute one of the cornerstones. [pg.21]
The experience of the OECD should make it a useful forum in which to begin this Atlantic-Japanese collaboration, although its procedures might have to be revised. [pg. 22]
While the author of Paper 1 was described as an “International author,” the author of Paper 2 was named as an American. The report from the 1973 meeting summarised his paper as follows:
An Atlantic-Japanese Energy Policy
Summary
The conclusions of the American author of this working paper could be summed up as follows:
The prosperity and security of the Free World depended on sufficient availability of energy on satisfactory economic terms. During the next ten to 20 years, oil would provide the mainstay of the world’s energy supplies. Because of the size of known reserves and the lead time for developing new resources, our growing needs would be supplied mainly by huge increases of imports from the Middle East.
The cost of these oil imports would rise tremendously, with difficult implications for the balance of payments of consuming countries. Serious problems would be caused by unprecedented foreign exchange accumulations of countries such as Saudi Arabia and Abu Dhabi.
A complete change was underway in the political, economic, strategic and power relationships between the oil-producing, importing and home countries of international oil companies and the national oil companies of producing and importing countries.
An energy policy for the oil-importing countries was an urgent necessity. It could not be limited to the Atlantic nations, but had to include Japan, the Free World’s second strongest economic power and one of its largest oil importers. It should also encompass South Africa, Australia and New Zealand, and should take account of importing developing countries in Latin America, Africa and Asia. But the suggestions in his paper would refer mainly to the Atlantic group plus Japan as the nations with major world influence and responsibilities.
Bilderberg Meetings, Saltsjobaden Conference 11-13 May 1973. Pgs. 22 and 23
Paper 2’s author noted that by 1980, for the first time “the US would be competing with Europe and Japan for major oil supplies from the Middle East … The USSR was likely to remain self-sufficient in oil and other energy requirements and might continue to be a net exporter of oil and natural gas.” He added:
The US thus had to share with Europe and Japan the deep concern about the physical availability, the terms of trade, the balance of payments impact, and the investment and monetary consequences of heavily increased oil imports. But the US carried the additional responsibility of protecting its capability to perform its global defence commitment, especially since the Soviet Union and China did not primarily depend on external sources of energy. The US could not afford an increasing over-dependence on a handful of foreign, largely unstable, countries. This would jeopardise its security (and that of its allies) as well as its prosperity and freedom of action in foreign policy formulation.
Bilderberg Meetings, Saltsjobaden Conference 11-13 May 1973. Pg. 24
The author described the changes in power structure which included the rise of the Organisation of the Petroleum Exporting Countries (“OPEC”) between 1960 and 1972 and the decline of the relative power of the US. “During the same period, American reserve productive potential had begun to disappear, and by 1972 the US had become one of the largest importers of oil,” he said.