In a recent interview with S&P Global Commodity Insights, Libya’s Oil Minister, Mohamed Aoun commented on the unlikely prospect of an OPEC-led oil embargo, in response to the ongoing Israel-Gaza war. He highlighted that the Organization, with its diverse membership including non-Arab nations, is unlikely to unify behind such an action, reminiscent of the 1973 Arab oil embargo that triggered a global energy crisis.
Aoun emphasized that the 13-member group includes countries that “might not share the same political stance as Arab oil producers, who are critical of Israel’s intensified operations in Gaza. This diversity in political views within OPEC makes a unanimous decision for an embargo improbable.”
While several Arab members of OPEC have voiced their criticism of Israel’s actions in Gaza, and the resulting high Palestinian civilian casualties, Iran has been the most vocal within OPEC advocating for a Muslim oil embargo. However, this proposal has not found support among Gulf producers. This call for action comes at a crucial time as OPEC+ ministers are scheduled to meet, to discuss future oil production levels.
Drawing parallels with the 1973 oil embargo, when Arab producers drastically cut oil production and stopped shipments to the US and other countries in support of Israel, Aoun mentioned the significant impact such actions had in the past. However, the contemporary geopolitical and energy landscapes are markedly different, as evidenced by the varied positions within OPEC+.
The US’ current oil imports from OPEC’s Gulf members, while significant, are lower than the levels during the 1970’s. The 1973 embargo notably led to the US developing strategic petroleum reserves, as a response to the crisis.
Aoun urged Arab countries to “explore all possible means to pressure the Western community to influence Israel’s actions in Gaza, without explicitly suggesting the use of oil as a tool. Any decision by Libya to use oil as a means of political leverage would be a governmental decision, not one for the oil ministry alone.”
The context of these statements is set against the backdrop of significant voluntary oil cuts by Saudi Arabia and Russia, leaders of the OPEC+ alliance. These cuts, in addition to the ongoing OPEC+ curbs, play a substantial role in shaping the global oil supply and prices.
Aoun’s statements reflect a cautious approach to using oil as a political tool in the current Israel-Gaza conflict, acknowledging the complexities within OPEC, and the broader international energy market.