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The energy crisis of the 1970s marked a crucial global transformation. Higher oil prices caused the greatest peacetime transfer of wealth and the largest single infusion of liquid capital into the global economy in history. Much changed after, but oil diplomacy also emerged out of the previous era. Since 1945, foreign policy and oil security had revolved around the well-being of first the domestic and then the global economy. A sense of impending danger to that well-being set the contours of policy and relations with different actors in the oil-rich Persian Gulf. American leaders saw a world in potential disarray and their concern over supply and price stability led the nation to greatly expand its military power in that region.
This chapter analyzes the political debates in the United States about arms sales to Iran and Saudi Arabia in the late 1970s and early 1980s. When the United States “lost Iran” in 1979, the presidential administrations of Jimmy Carter and then Ronald Reagan identified regional instability as a threat to the security of the oil-rich Persian Gulf and “global economic health.” Both administrations turned to arms sales as a means to secure alliances in the face of American vulnerability. In this context, the burgeoning military sales relationship between the United States and Saudi Arabia arrived through an Iranian workshop. Congressional debates about the sale of fighter jets and AWACS to both nations, as well as the corporate lobbying of the Bechtel Corporation, reveal important logical columns in this shift to a more aggressive foreign policy based on military relationships: the link between economic growth and US Cold War legitimacy, the importance of military sales to the US domestic economy, and the crucial place of weapons transfers in good relations with the ruling monarchies in Iran and then Saudi Arabia. When it came to the regional security of the Middle East and secure flows of its oil, this was the time when military force began to become the premier instrument of US diplomacy for a new global age.
This article examines Libyan–US relations through the historical lenses of decolonization, international law, the Cold War, and the international political economy. The Libyan government exercised its newfound sovereignty in the postwar era through the negotiation of ‘base rights’ for the US government and ‘oil rights’ for corporations owned by US nationals. They did so in conjunction with other petrostates and through international organizations such as the United Nations, the Arab League, and the Organization of Petroleum Exporting Countries. Libyan leaders’ strategy of using sovereignty to promote corporate competition relied on connections with similarly situated nations, and it was through global circuits of knowledge that they pressed the outer limits of economic sovereignty. At the same time, the US government consistently accommodated Libyan policies through Cold War arguments that linked the alliance with Libya to US national security. Those deep foundations of sovereignty and security created the conditions for the transformation of the global oil industry after Libya’s 1969 revolution.