How small states break oil sanctions: Israel’s oil import strategy in the 1970s

ABSTRACT

This article argues that small oil-importing states are particularly adept at circumventing oil sanctions and leveraging them to further expand their own markets. It points to the unique advantages and necessary preconditions that make small states successful in their search for ‘sanctions busters’ in the global oil market, especially when approaching countries that recently became oil exporters. Using declassified Israeli, British and US archival material, this article sheds light on how Israel capitalized on the 1973 Arab oil embargo to gain access to Ecuador’s market through its oil sector, but failed to repeat this success in Norway and the United Kingdom.

KEYWORDS:

• Oil
• sanctions busting
• small states
• Israel
• embargo

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

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⁵² Crawford, ‘Oil Sanctions Against Apartheid’; Rowe, Manipulating the Market.

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⁵⁶ Bialer, Oil and the Arab-Israeli Conflict, 235

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⁶⁴ Elizur and Salpeter, Israel‘s Oil Adventure.

⁶⁵ Bialer, Israeli Foreign Policy.

⁶⁶ Elizur and Salpeter, Israel‘s Oil Adventure, 146, 193.

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⁶⁹ Henry Kamm, ‘Israel Expects Oil Flow to Go On’, New York Times, 25 January 1974, p. 3.

⁷⁰ S. J. Randall, ‘The 1970s Arab-OPEC Oil Embargo and Latin America’, H-Energy (2013), p. 3

⁷¹ Reuters, ‘Ecuador to Act Independently from OPEC’, New York Times, p. 66. ISA MFA 3284/15. 17 September 1974; Ministry of Foreign Affairs, State of Israel, ‘Ecuador es cola de un camello en OPEP, dicen’, El Tiempo, 29 July 1975. Enclosed in Yitzhak Shefi, Memorandum for Yaari, Shmuel, ‘Ecuador and OPEC’, ISA MFA 3284/8, 31 July 1975.

⁷² Arie M. Kacowicz, ‘Triangular Relations: Israel, Latin American Jewry, and Latin American Countries in a Changing International Context, 1967–2017’, Israel Journal of Foreign Affairs 11/2 (2017), 203–215.

⁷³ Robert C. Feenstra et al., ‘World Trade Flows: 1962–2000’, National Bureau of Economic Research (2005).

⁷⁴ Yosef Shofman, Letter, ‘Venezuela’s Oil Problems (with Relations to the Arab States) and Their Implications on Relations with Us’, ISA MFA 3251/1, 13 Mar. 1972.

⁷⁵ Bialer, Oil and the Arab-Israeli Conflict, 130–132.

⁷⁶ Gad Elron, ‘Ecuador’, Memorandum for Shimon Amir, ISA MFA 3284/15, 17 June 1974.

⁷⁷ Ibid.

⁷⁸ Yaakov Ben-Ami, Telegram 21 to the Ministry of Foreign Affairs, ISA MFA 3284/15, 6 March 1974; Ministry of Foreign Affairs, Economic Division, State of Israel, Telegram 159 to the embassy in Quito, ISA MFA 3284/15, 30 April 1974; Sadot and Harlev, Telegram 54 to the Ministry of Foreign Affairs, ISA MFA 3284/15, 10 April 1974.

⁷⁹ Bishara Bahbah and Linda Butler, Israel and Latin America (Houndmills, Basingstoke, UK: Macmillan, 1986), 114.

⁸⁰ Eshel, ‘Weapons to Ecuador’, Memorandum for Director General of the MFA, ISA MFA 3520/10, 23 December 1965.

⁸¹ Yitzhak Shefi, Urgent Telegram no. 59 to the Ministry of Foreign Affairs, ISA MFA 3284/15, 29 January 1975.

⁸² Ido Dissentchik, ‘Ecuador President: We Will Continue Selling Oil to Israel’, Maariv, 22 July 1979, p. 1 (Hebrew).

⁸³ Feenstra et al., ‘World Trade Flows’.

⁸⁴ Shmuel Sivan, ‘Appointing an Economic Representative in Ecuador’, ISA MFA 3284/8, 19 November 1975.

⁸⁵ Bahbah and Butler, Israel and Latin America, 114.

⁸⁶ Ibid, 114–115

⁸⁷ Cyrus R. Vance, ‘Memorandum for the President’, Presidential Papers of Jimmy Carter; Plains File; Subject File: State Department Evening Reports 10/79 through State Department Evening Reports 10/80; Box 40, folder State Department Evening Reports 11/79, 27 November 1979, p. 3.

⁸⁸ Ziv Rubinovitz and Elai Rettig, ‘Crude Peace: The Role of Oil Trade in the Israeli-Egyptian Peace Negotiations’, International Studies Quarterly 62/2 (2018), 371–382.

⁸⁹ Elizur and Salpeter, Israel‘s Oil Adventure, 157–162.

⁹⁰ Esther Edelstein, ‘Norway: No Oil Until 1980s’, Maariv, 13 September 1979, p. 2 (Hebrew).

⁹¹ Schreiber, Memorandum, ‘International Petroleum Exchange Crude Oil’, ISA GL 57,498/10 (n.d.).

⁹² Ibid.

⁹³ Tony Benn, ‘North Sea Oil (Sales to Israel)’, Parliament Debate, vol. 962, 12 February 1979. https://hansard.parliament.uk/commons/1979-02-12/debates/0b3a1b05–0538–4609-89c5-4d510844cae4/NorthSeaOil(SalesToIsrael); Williams Shelton, M.J., MP, ‘British Government Policy on the Export of North Sea Oil’, ISA GL 57,498/10, 27 October 1983.

⁹⁴ AP, ‘Mondale Will Demand Norway to Supply Oil to Israel’, Maariv, 13 April 1979, p. 2 (Hebrew).

⁹⁵ Hilde Henriksen Waage, ‘How Norway Became One of Israel’s Best Friends’, Journal of Peace Research 37/2 (2000), 189–211.

⁹⁶ Bishara A. Bahbah, ‘The United States and Israel’s Energy Security’, Journal of Palestine Studies 11/2 (1982), 113–131; Rubinovitz and Rettig, ‘Crude Peace’.

⁹⁷ Alexander R. Wieland (ed.), Foreign Relations of the United States, 1977–1980, Volume 9: Arab-Israeli Dispute, August 1978–December 1980 (Washington, DC: United States Government Printing Office, 2014), document 184, pp. 645–646.

⁹⁸ James Schlesinger, Memorandum to the President, ‘U.S. Oil Supply Commitment to Israel’, Presidential Papers of Jimmy Carter; National Security Affairs; Brzezinski Material; Country File; Israel 1–4/79 through Israel 4/25–30/80; Box 36, folder Israel, 1–4/79. 8 January 1979.

⁹⁹ Archie Lamb, Memorandum to the foreign office, ‘Norwegian oil to Israel’, The National Archives (hereafter, TNA), FCO 93/2103, 23 January 1979.

¹⁰⁰ Hilde Henriksen Waage, ‘Explaining the Oslo Backchannel: Norway’s Political Past in the Middle East’, Middle East Journal 56/4 (2002), 603–4.

¹⁰¹ Teddy Preuss, ‘Norway – Still Friendly’, Davar, 15 November 1981, p. 7 (Hebrew).

¹⁰² Helge Ole Bergesen, ‘”Not Valid for Oil”: The Petroleum Dilemma in Norwegian Foreign Policy’, Cooperation and Conflict 17 (1982), 114.

¹⁰³ Schreiber, ‘International Petroleum Exchange Crude Oil’.

¹⁰⁴ Nigel Ashton, ‘”A Local Terrorist Made Good”: The Callaghan Government and the Arab – Israeli Peace Process, 1977–79’, Contemporary British History 31/1 (2017), 114–135; Azriel Bermant, Margaret Thatcher and the Middle East (Cambridge: Cambridge University Press 2016); Neill Lochery, ‘Debunking the Myths: Margaret Thatcher, the Foreign Office and Israel, 1979–1990’, Diplomacy & Statecraft 21/4 (2010), 690–706.

¹⁰⁵ Official Working Group on BNOC and Overseas Policies, ‘Israel: BNOC Supplies of Oil from the North Sea, Report’, TNA, FCO 93/2103, 26 September 1978; David Owen, Memorandum for James Callaghan, ‘Supply of North Sea Oil to Israel’, TNA, FCO 93/2103, 17 January 1979.

¹⁰⁶ ‘Segments from the Arbitrator’s Ruling, O.G Bulk’, ISA GL 57,498/10, 1983.

¹⁰⁷ Gaby Kesler and Yosef Waxman, ‘Britain: Low Priority for Israel in Oil Supply’, Maariv, 12 December 1979, p. 4 (Hebrew).

¹⁰⁸ Elizur and Salpeter, Israel‘s Oil Adventure, 208–209.

¹⁰⁹ Crawford, ‘Oil Sanctions Against Apartheid’; Rowe, Manipulating the Market.

¹¹⁰ The authors wish to thank the journal’s anonymous reviewer for suggesting this possibility.

¹¹¹ Early, ‘Sleeping with Your Friends’ Enemies’; Early, ‘Unmasking the Black Knights’.

¹¹² Martin, Coercive Cooperation.

¹¹³ Visoka and Doyle, ‘Neo‐Functional Peace’; Bove, Deiana and Nisticò, ‘Global Arms Trade and Oil Dependence’.

Additional information

Notes on contributors

Elai Rettig

Elai Rettig (corresponding author): Assistant Professor at the Department of Political Studies, Bar-Ilan University. Senior researcher at the Begin-Sadat Center for Strategic Studies (BESA). Formerly, Israel Institute Teaching Fellow in the Department of Jewish, Islamic, and Middle Eastern Studies (JIMES) at Washington University in St Louis. Ph.D. earned at the School of Political Sciences, University of Haifa.

Ziv Rubinovitz

Ziv Rubinovitz: Research Fellow at the Chaikin Chair for Geostrategy, and Research Coordinator at the Chaikin Chair, the Maritime Policy and Strategy Research Center, Ezri Center for Iran and Gulf States Research and Wydra Division for Shipping and Ports, University of Haifa. Formerly, Israel Institute Teaching Fellow at Sonoma State University. Ph.D. earned at the School of Political Sciences, University of Haifa.