ARABS BRANDISH OIL AS A WEAPON -- POSSIBLY INFLUENCES BUSH U-TURN IN POLICY

by DEBKAfile 5 April 2002

"Friday, April 5, Iran’s spiritual leader, Ayatollah Ali Khamenei, called on Arab states to enforce a one-month oil embargo against Western countries, to pressure them to stop supporting Israel. A similar call issued from Baghdad on Monday, April 1.

This following passage comes from the DEBKA-Net-Weekly, Issue 55, which was published earlier:
As oil prices soared to a six-month high, Iran and Iraq began muttering this week about aMuslim-Arab oil embargo for bending America to their will.(DEBKA-Net-Weekly predicted this development in its January 25, 2002 Issue, No. 46.)

Now, they are not thinking terms of the 1973-4 all-Arab oil embargo - but rather of combining in an Iranian-Iraqi-Saudi bloc to stand against the US-Russian partnership. This embargo would only target the United States, Russia and Israel, but not affect Japan, China and West Europe.

DEBKAfile’s Gulf sources add that Iran’s leaders, backed by Iraq - with Saudi Arabia quietly active in the wings - are hard-selling their oil embargo plan. As terrorism spreads, this hardline Muslim axis expects to apply the Arab oil embargo threat as an irresistible weapon for forcing the Bush administration to turn its back on Israel and swing its support behind Yasser Arafat.

Our oil experts point out, however, that times have changed since the 1973-4 Arab embargo. The United States is no longer solely dependent on Arab oil producers. Iraq, Iran and Saudi Arabia, the largest oil-producing bloc in the world, will not risk losing their primary source of revenue in the long term. However their threat alone is enough to throw world oil prices – expected to shoot up in the next day or two – into disarray, as well as shocking financial markets. All three producers will make sure to keep their markets in Japan and Europe - even if they have to bypass their own embargo."