Jim_Krane]_Energy_Kingdoms__Oil_and_Political_Sur

THE BIG PAYBACK45

that Saudi greenhouse- gas emissions were actually higher in the 1970s
than they were as recently as 2010.^3 In 1971, when Shell discovered Qatar’s
massive offshore North Field, the largest single gas reservoir known
to man, the company viewed it as a disappointment because there were
no export markets within pipeline reach. Shell capped and abandoned
the well.^4 Diverging interests only made ruling sheikhs more deter-
mined. They accelerated the push for nationalization.
The gathering nationalization wave finally hit in 1972, crashing over
the global oil patch like a tsunami. That year alone, Venezuela, Algeria,
and Libya grabbed controlling shares of their oil sectors, sending long-
time concession holders packing. In 1973, Iran took over all remaining
assets of the old 1953 consortium. Saudi Arabia, Kuwait, and Qatar began
revoking their concessions at the same time. Nationalizing states joined
OPEC, if they weren’t already members. The burgeoning cartel welcomed
the UAE, Indonesia, and Nigeria.
By 1973, OPEC controlled 51 percent of global oil output. The decades
of IOC control over oil supply and prices were over. Nationalization
didn’t just give OPEC members bargaining power. It also gave them stra-
tegic power: the capability to disrupt the global economy.

THE FIRST OIL SHOCK

And disrupt the global economy they did. In 1973, the six Gulf OPEC
members embarked on two tests of their newfound market power. The
six unilaterally raised oil prices by 6 percent in April and then by another
12 percent in June. But these uncontested increases were just the precur-
sors to a much bigger collective action: the 1973 oil embargo.
The impetus for the embargo was Israel’s 1967 seizures of Arab land,
including the Al- Aqsa Mosque in Jerusalem, Islam’s second- holiest site.
The Arab OPEC countries had perceived this as an egregious imposition
upon their sovereignty, and the sweeping nationalizations of oil sectors—
and the feeling of collective power these seizures produced— may have
emboldened the Arab leaders to take a stand against this affront. Their