Slipping Around the Embargo

Clearly, something mysterious was afoot. While Ahmed Zaki Yamani, Saudi Arabia's oil minister, wandered about Europe promising a continued flow of oil to the Arabs' "friends" and privation to enemies, almost the opposite seemed to be happening. In Britain, Germany, Italy and other nations classified by the Arabs as friendly or neutral, serious energy shortfalls loomed. But in The Netherlands, the one Common Market nation on the Arab embargo list, some Christmas lights continued to blaze and visitors reported hotel rooms occasionally so toasty that windows had to be thrown open. Though the Dutch led Europe in banning Sunday driving, their other conservation measures are actually less stringent than those of some European neighbors.

The embargo obviously is being circumvented by the major multinational oil companies, with at least the knowledge if not the active cooperation of European governments. In a Europe desperately afraid of further offending the Arabs, no one wants to talk about the strategy, but it seems to work like this: the oil companies are duly sending elsewhere Arab oil that normally would go to The Netherlands. But they are replacing it by rerouting to Rotterdam oil from Nigeria, Venezuela or Indonesia that usually would go to Britain, Germany or other countries--over the protests of some British distributors who have not yet received some shipments that they were promised.* In addition, even some Arab oil may still be flowing into The Netherlands.

Why would the multinationals, vulnerable to Arab nationalization of their wells, so effectively frustrate the spirit of the boycott--and why would governments go along with a practice that seemingly hurts their own citizens? Actually, they have little choice. Rotterdam is the largest refining center in Northern Europe. Shell, Exxon, Chevron, British Petroleum and Gulf all have huge refineries there that supply neighboring countries as well as the Dutch.

Winking at Help. The oil companies must try to keep serving the customers of those refineries or risk being sued for breach of contract. Moreover, Rotterdam's "Europort" is more than twice as big as any other port in the world (the runner-up is not even in Europe, but in Kobe, Japan). Only a few supertankers can be diverted from Rotterdam to Le Havre, the strongest rival port.

Even the Arabs seem to be winking at the continued supplying of The Netherlands. Abdul Rahman al Attiki, Kuwait minister of oil and finance, is on record as saying: "If Europe wants to deprive itself of oil to help Holland, that is its business. But should they defy the Arab states by announcing solidarity with Holland publicly, then we shall take measures against them." The message could not have been clearer if it had been shouted from a minaret: Reroute shipments all you please--just don't talk about it.

That statement indicates not naivete but subtle strategy. The Arabs fully appreciate that Rotterdam is the critical conduit for oil to Northern Europe. By singling out the Dutch, they are able to menace all of Europe while officially punishing only one nation. By allowing the continued--though significantly reduced--flow of oil through the Dutch port, they prevent total European collapse (which they do not want) while gaining more efficient control over that flow than if they had to track down where each barrel of their oil is going. Just as easily as they wink at the subterfuge, they can stop it when they please --and really freeze out Europe.

* The oil companies can easily shift the destinations--as well as the source--of thousands of barrels of crude in minutes by a few calls to tanker captains. In 1951, when Iran's Premier Mohammed Mossadegh nationalized that country's wells, the multinationals overnight dropped Iran's share of the world market from 6% to zero.

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