ABSTRACT
The 1970s inaugurated a period of dramatic and spectacular change in the Middle East. Egyptian troops crossed the Suez Canal in an offensive which marked the beginning of the October 1973 war, the first time the Arabs had taken the initiative against the Israelis; the Arab oil-producing states decreed a boycott of the world's most powerful state, the USA; and OPEC, the grouping of Third World oil producers, doubled the price of oil in a single afternoon and a few weeks later doubled it again. Within a matter of months, prices quadrupled from $3 to $11.65 a barrel. In 1979 following the Iranian Revolution, prices leapt up again, with OPEC oil selling at $37 a barrel by mid-1980. Huge sums accrued to the major exporters; oil revenues of the eight Middle Eastern members of OPEC rose from US $16,891 million in 1973 to US $219,107 million in 1980 (Table 10.1). Some observers spoke of the dawn of a new era of development and economic prosperity. OPEC countries would dictate the course of world energy development and dominate the world financial system; it was to be the Arabs’ ‘decade of destiny’, while the Shah of Iran boasted that Iran would soon become an industrial power, the equal of Japan and Germany.
