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The Masquerade 329

of the pan-Arab political arena. When war broke out in June 1967, however,
the wave of emotion which swept the Arab world compelled the governments
of the oil states, despite their private misgivings, to make a gesture of sacrifice
in support of the common cause. They did so by ostentatiously declaring an
embargo upon the export of oil to the world outside. Hardly had the embargo
been proclaimed, however, than it was quietly ignored by the governments
concerned, which were well aware of the financial losses they could expect to
incur if the embargo were really to be put into effect. Within a week or ten days
of the declaration of the embargo, Saudi Arabia, Kuwait and Iraq were again
permitting the shipment of oil to other countries, with the sole exception of the
United States, Britain and West Germany, who were accused of actively

supporting the Israelis. Since these were three of the biggest customers for
Middle-Eastern oil it was obvious that the embargo against them could not be
sustained, except at an unsupportable cost. At the summit conference held
at Khartum in August 1967 to decide upon the policy to be followed by the
Arab states in the aftermath of the war, the consent of Egypt, Jordan and
Syria, the countries which had suffered most in the conflict, to the lifting
of the embargo was obtained in exchange for a promise by the major oil states
(Saudi Arabia in the main) to make good the trio’s loses by annual financial
contributions.
The experience had been an unnerving one for the three most conservative
oil states, Saudi Arabia, Kuwait and Libya, and shortly afterwards they
proceeded to take steps to protect themselves against its recurrence. In January
1968 they founded the Organization of Arab Petroleum Exporting Countries
with the object of insulating the production and sale of oil from politics - Arab
or international. Membership of the new organization was confined to Arab
countries whose principal export was oil, a requirement which operated to shut

out those with radical governments, like Egypt and Algeria. As an additional
precaution, it was also laid down that membership should be dependent upon
the approval of the three founding members, a condition which served to keep
the refractory Iraqis out. A more encouraging aspect of the events of 1967
for the oil-producing countries was that they afforded them an opening to
press for increased revenues. Saudi Arabia’s output had not really been
hit by the embargo: in fact, by the end of the year production had risen by
9 per cent over the preceding year. Iraq, in contrast, had suffered a decfine in
production of 15 per cent as a consequence of the closure of the Mediterranean
pipeline by Syria. It was a loss which gave the Saudis and Kuwaitis not a
little cheer.
The closing of the Suez Canal and the consequent increase in the transport
costs of oil led Saudi Arabia and Iraq, though not in concert, to press the
companies for a premium to be paid on oil delivered at Mediterranean ports
through TAPline and the pipeline from Mosul and Kirkuk. The com­
panies agreed. Meanwhile the Persians had been taking full advantage of the