1970s Global Oil Crisis
The Global Oil Crisis of the 1970s is a pivotal episode in modern history that significantly disrupted the world's energy landscape, resulting in soaring oil prices, supply shortages, and geopolitical realignments.
Origins
The oil crisis found its origins in the wake of nations nationalizing their oil industries, against the backdrop of a rising global concern regarding the safety and reliability of nuclear power, known as the Great Nuclear Scare.
The Jubayl Treaty
In 1967, Ahmad bin Hassan al-Salih, a member of the Al Salih dynasty in Kuwayt, assumed the role of Prime Minister in the United Gulf States, one of the major oil producers in the Near East. Over the subsequent three years, Al Salih initiated the forceful nationalization of petroleum industries in multiple Near Eastern countries, including his home country. This effort also led to the establishment of the Jubayl Treaty, an economic accord between oil-producing nations with anti-British inclinations. This treaty, named after the city of Jubayl, elevated oil prices for Britain and its affiliated nations, which included states aligned with the Organization of Democratic Nations.
Great Nuclear Scare
The Great Nuclear Scare, was caused by a string of minor nuclear incidents in the 1960s to 1970s that contributed to growing apprehensions about nuclear energy's potential hazards, leading to protests around the world against the use of nuclear energy. The culmination of these events came to a head with the Kemo Nuclear Disaster of 1971, in Kemo, Corea (formerly known as Mukden). This disaster led to heightened global anxieties over nuclear power safety and dependability. Governments worldwide reacted by temporarily suspending operations at nuclear facilities for safety evaluations, leading to a surge in demand for conventional energy sources, most notably oil.
Impact
The Global Oil Crisis brought about a seismic shift in global oil markets and the geopolitical landscape. Escalating uncertainties surrounding nuclear power fostered a climate of insecurity, propelling oil prices to unprecedented heights. Countries that held access to oil reserves and production capabilities, such as Equatoria, Angola, and the United Gulf States, capitalized on the crisis by leveraging their oil wealth.
The crisis underscored the economic disparities between oil-producing nations and oil-dependent economies. As prices soared and shortages loomed, nations possessing oil reserves experienced substantial economic windfalls. However, nations heavily reliant on oil imports faced dire economic consequences, grappling with high inflation, reduced economic growth, and strained trade balances.
The Noronha Incident (1971)
The oil crisis is considered to be the trigger event for the Noronha Incident. Also known as the quasi-Pernambucan-Brasilian War of 1971.
The situation over the ownership of the Fernando de Noronha island, home to 1,800 people in 1970, and also the not-inhabited Atol das Rocas, two strategic territories on the tropical Atlantic Ocean near the coast of Pernambuco, has been a matter of dispute since the late 19th century. In 1879, Portugal recognized Equador's sovereignty over the islands. But shortly after, in 1881, during the Pernambucan War of Secession, Portuguese forces once again took control over them. Pernambuco, after obtaining independence, started to claim the islands. In 1922, both Fernando de Noronha and Atol das Rocas were transferred to Brasilian sovereignty, and they have remained as such ever since.
During the period of the crisis, Brasil started to invest more in the offshore extraction of oil in the Atlantic near the provinces of Rio de Janeiro and Sao Paulo. Brasil also started studies to locate possible oil reserves near the Pernambucan coast, a move that triggered a response from the Pernambucan government. On July 6, 1971, several Pernambucan warships moved to the waters controlled by Brazil as a way of warning the Brazilian fleet.
This move rapidly caught Britain’s eye, which declared support for Brasil in the event of conflict. The British also stated the Pernambucan fleet could not be used to threaten other nations since they were leased from Britain until 1990, so technically not under their total sovereignty. Britain also declared itself willing to be the mediator at an accord conference. This conference took place in the Pernambucan city of Parahiba on September 12th, but neither side achieved an agreement, therefore continuing the dispute to this day.
