CounterPunch Exclusives

CounterPunch Exclusives

The Subsidized Occupation: Palestine and the Arabs

Photograph by Nathaniel St. Clair

The modern Middle East suffers from a consequentially glaring paradox: oil-rich Arab states undoubtedly possess some of the most concentrated geopolitical and economic leverage on the planet.  Yet, they have, since the 1970s, declined to use their economic indispensability in defense of Palestinian statehood and to uphold their own sovereignty.

The pivot of Arab Gulf states away from historical Arab nationalism to Western alignment reflects a fundamental shift in regional priorities. Arab monarchs have traded their independence and vast regional clout for Western economic integration, advanced defense technology and foreign security assurances.

The global community has, for decades, been led to believe that the path to Palestinian self-determination is a knot too complex to untangle. The reality, however, is far more transactional.

The wealthy Gulf capitals and the wider Arab oil-producing bloc possess four critical pressure points that could be acted on to force a diplomatic breakthrough or affect meaningful regional change.  None, however, have been employed: 1) oil power; 2) sovereignty over waterways; 3) petrodollars; and 4) power of the umma.

In 1973, Arab oil-producers demonstrated the efficacy of wielding oil as an economic weapon. It was one of those rare moments when Arab regimes exploited their leverage to challenge Western imperialism.

After the start of the October 1973 Arab-Israel War between Egypt, Syria and Israel, the Organization of Arab Petroleum Exporting Countries (OAPEC) imposed a total oil embargo in response to U.S. support for Israel during the war. They demanded that Israel withdraw from Palestinian lands they occupied in the 1967 War.

OAPEC’s collective action caused shortages, triggered a massive recession and led to a realignment of the global economy.  The embargo generated massive revenue windfalls for producing states.  The sudden influx of capital accelerated the nationalization of their oil industries, allowing them to gain control of assets previously held by U.S. and British stakeholders.

Despite the unprecedented wealth gained by Arab producers, the geopolitical landscape remained unchanged when OAPEC lifted the embargo in March 1974. ........

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