The Observer is a pale shadow of what it once was but it still has a lively Business section. Every fortnight Business carries a column from the American investigative journalist Greg Palast who is about as good as it gets these days on the interface between corporate interests and politicians. (1) In that Business section on 14 January, p.7, was a long interview with Sheikh Yamani, who was the Saudi Oil Minister from 1962-86. In which was the following. Of the notorious 1974 ‘oil price hike’ Yamani is quoted as saying:
‘”I am 100% certain sure that the Americans were behind the increase in the price of oil. The oil companies were in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.”‘
‘He says he was convinced of this by the attitude of the Shah of Iran, who in one crucial day in 1974 moved from the Saudi view, that a hike would be dangerous to OPEC, because it would alienate the US, to advocate higher prices.’
‘Yamani: “King Faisal sent me to the Shah of Iran who said, ‘Why are you against the increase in the price of oil? That is what they want. Ask Henry Kissinger – he is the one who wants a higher price.”‘
‘Yamani contends that proof of his long-held belief has recently emerged in the minutes of a secret meeting on a Swedish island where UK and US officials determined to orchestrate a 400% increase in the oil price.’
This is a huge story – if true – because that quadrupling of the oil price in 1974 really gave us the modern world as we know it. The quadrupling of the price of oil caused inflation throughout the industrialised world; that inflation undermined the mild social democratic governments then in charge of most of Europe and Australasia: and that inflation was the rationale for the revival of pre-WW2 economic ideas about the centrality of the money supply – so-called monetarism – which swept the right into power in much of Europe, America and Australasia. It is arguable that without the oil price hike in 1974 we would not have had Thatcher, Ronald Reagan and their subsequent effects on the world.
An e-mail to the Observer journalist who conducted the interview with Yamani went unanswered but I had an idea: Yamani’s talk of a meeting in Sweden in 1973 rang a bell with me: was there not a Bilderberg meeting in Sweden around then?
A quick search on the Net produced the answer ‘Yes’, there was a Bilderberg meeting then: but what was the agenda that year? Searches for Bilderberg 1973 meeting produced a number of claims that the rise in the price of oil had indeed come from that meeting.
For example, a piece by Herman Tiu Laurel has this: (2)
‘The EIR’s Jonathan Tannenbaum writes, “….. in May, 1973, a secret meeting of the so-called Bilderberg Group at Saltsjobaden in Sweden, including representatives of the London oil cartel and leading Anglo-American financial interests, makes plans for a 400% increase in oil prices and the recycling of oil revenues through the Anglo-American banking system.”‘
But do I trust the Lyndon LaRouche organisation’s EIR as source? No I do not. I still needed evidence – preferably in the shape of the minutes of the 1973 Bilderberg meeting. Back to the search engine which eventually coughed up a name I recognised, that of the Lobster contributor David Guyatt, apparently making the same claim about that Bilderberg meeting. An e-mail to Guyatt asking about the 1973 meeting produced the response that he had a copy of the minutes of that meeting, that they were 70 pages of them, and that he would, eventually, make me a copy. Never mind the 70 pages, I replied, what was on the agenda that year? And is there anything to stand up the claim that the oil price hike arose out of that meeting? He replied thus:
‘Without reading it all again – and it’s pretty dreary stuff – half of agenda was devoted to “Energy”. For example, the first item on the agenda was “The Possibilities of the Development of a European Energy Policy, and the Consequences for European-North American Relations.” It was all to do with oil and recycling petro-dollars and the impact on the Balance of Payments and Western Security etc. Attached is a page from the Bilderberg minutes for May 73 showing a discussion about the price oil should be. You’ll see that there is a discussion that the price of oil could range from $10.00 to $12.50. This when the price was around $3 per barrel. By January 1974 the Benchmark price was just under $11.50pb. The background to this – at least in my view – was Nixon taking the dollar off the gold standard in 1971.’
The actual section from the Bilderberg minutes says this:
‘An American speaker pointed out that one official US estimate of the future delivered price had been as high as $5 a barrel – which was now perhaps on the low side – but that certain costs factors would reduce the net return to the producing countries by around $1. Two other American participants reported that the author of the estimate just referred to – Mr James Akins – had subsequently said that the $5 figure would prove too low and might indeed range up to $10 -$12.50 a barrel.’
I ran this past the economic historian Dr Scott Newton. He responded thus:
‘After reading your e-mail I remembered I have from way back a copy of Energy Policy in Perspective, a Brookings Institution study of 1981, edited by Crawford D. Goodwin. It’s worth having a look at this because it becomes clear that there were senior US officials around in the early 1970s actually expecting an increase in the price of oil. Their predictions were based on a simple reading of the way events were moving: western demand in conjunction with the market power of OPEC and the middle eastern situation made some kind of jolt inevitable. On page 446 Goodwin says:
“As early as the spring of 1970 Akins’s Fuel and Energy Office put together the implications of reduced reserves of domestic natural gas and the success of Libya in negotiating better terms from the oil companies and began predicting a price for crude at the Persian Gulf of $4.50 by 1980. Three years later Akins (3) warned publicly that OPEC was in an uncommon position for a cartel, since it controlled a product that was virtually irreplaceable in the short run.”‘
Newton continued:
‘Note also that in April 1973 Yamani was warning the USA that his country would find it difficult to increase oil production for export to the US unless Washington helped settle Mid Eastern problems “to the satisfaction of the Arab states” (Goodwin, p. 445). Interestingly, Kissinger seems to have believed that OPEC’s power was transient, as (so he thought) all cartels were inherently unstable. In consequence Kissinger (who “had neither a taste nor a head for economics”, Goodwin p. 446) did not take the prospect of shortages and long-term changes in the market seriously until well into 1974, and until then resisted the efforts of Akins to push for a move to greater US self-sufficiency in energy policy.’
‘What does this add up to? Perhaps the real story is something like this. First an increase in the price of oil was predictable in the circumstances of spring 1973 and indeed had been foreseen for some time. Second, Kissinger may have been initially relaxed about even a substantial hike because he did not think OPEC would be able to keep its act together. It is possible that he believed a change in the price might be useful to some oil corporations whose financial difficulties were threatening the banks. None of this means that the OPEC shock was engineered by the US as part of some secret agenda which was a surprise even to the oil producers themselves.’
Which tells us what? If Bilderberg 1973 is the meeting referred to by Sheikh Yamani – and that seems very likely, if not certain – the evidence falls very far short of claims that the Bilderbergers created the oil price hike. Indeed, the evidence offered by Newton suggests that all this was ‘in the wind’ at the time.
Notes
- You can read Palast’s recent journalism at his new Website www.gregpalast.com
- http://www.radiopinoyusa.com/matanglawin/ml-09-25-2000.html
- The Akins in the Bilderberg minutes discussed above – RR