The 1973 Airlift That Saved Israel and Cost America an Oil Embargo

In the winter of 1973, Americans sat in line at gas stations, sometimes for an hour, and nobody could quite say what they were waiting for. The country had not been invaded. No factory had been bombed. A group of oil-producing governments had decided to turn a spigot, and a nation that thought of itself as the master of its own economy found out what it meant to buy a vital commodity from sellers who did not wish it well. That is the second half of this story. The first half is a transport plane landing in a war zone with ammunition on board.

My claim is that two lessons came out of October 1973, and that both still hold. The first is that a free ally in mortal danger must be helped fast, because the help that arrives late is help that arrives to a funeral. The second is that a country which depends on hostile suppliers for the lifeblood of its economy has handed them a veto over its foreign policy. The embargo is the cost of the first lesson and the tuition for the second.

Let me define terms. Materiel means military supplies, weapons and ammunition. An airlift is the movement of that cargo by air. OAPEC, the Organization of Arab Petroleum Exporting Countries, was a body of oil-producing Arab states, separate from the wider OPEC. An embargo is a ban on selling to a particular country.

October 6: the surprise

On October 6, 1973, which was Yom Kippur, the holiest day of the Jewish year, Egypt and Syria attacked Israel at the same moment. Egyptian forces crossed the Suez Canal and overran the thin line of Israeli defenses on the east bank, and Syrian armor swept into the Golan Heights. Israel was caught unprepared. Its army was mobilizing from synagogues and homes. Its early losses were heavy, in part because Egyptian and Syrian forces were equipped with modern Soviet anti-aircraft missiles and anti-tank weapons that blunted the Israeli advantages in air power and armor.

The Soviet Union had been supplying its Arab clients with weapons for years, and it resupplied Egypt and Syria by air during the fighting. Israel's own stockpiles of ammunition and equipment, used heavily in the first days, began to run low. This is the part of the story that is often skipped. The problem was not only a surprise attack. It was that a small country with a small industrial base could not sustain a war of this intensity for more than a short time without help.

Nixon's decision

Israel asked the United States for resupply almost at once. Washington's response, in the first week, was slow and caught up in an argument inside the government about how much to send and how visibly to send it. The administration, led by President Richard Nixon and with Henry Kissinger as both national security adviser and secretary of state, was afraid of provoking the Arab states and the Soviet Union, and of damaging the diplomacy with Cairo that Kissinger hoped to conduct. Planes were chartered, then the charters fell through, and days were lost.

By the second week the decision changed. Nixon ordered that Israel be resupplied by American military aircraft, and on October 12 he told the Air Force to send everything that could fly. The first giant C-5 Galaxy landed at Israel's Lod airport on October 14. The operation was code-named Nickel Grass. C-5 and C-141 Starlifter transports, flown by the Air Force, carried tanks, artillery, ammunition, aircraft parts and other equipment to Israel until the operation ended in mid-November.

The Azores

There was a practical problem that tells you something about the alliance system. A flight from America to Israel crosses the Atlantic and the Mediterranean, and the planes needed to land and refuel. Most of the NATO allies in Europe, nervous about their own oil supplies and wary of Arab anger, refused to allow American aircraft to use their bases or to fly through their airspace for the operation. Portugal did not refuse. It allowed the planes to refuel at Lajes Field, on Terceira island in the Azores, and that permission made the airlift workable.

I want to dwell on that for a moment. The Atlantic alliance, which America had joined in 1949 and which had defended Western Europe for a quarter of a century, produced almost no country willing to hold the door. The others did the arithmetic about oil and concluded that principle could wait. Anyone who thinks an alliance is a one-way arrangement should look at the Azores and ask which allies kept their commitments when it cost something. For an alliance's actual text and what it promises, see Read the North Atlantic Treaty, All Fourteen Articles Take Ten Minutes.

What was delivered

The numbers are large. Over about a month, the airlift delivered roughly 22,000 tons of materiel by air. A sea lift delivered more in total weight, roughly 33,000 tons by the end of October, though it took longer to arrive. In the first days of the airlift, the most important cargo was ammunition and replacement parts, and later tanks and aircraft. The cargo did what it needed to: it replaced equipment that Israel had lost and allowed its forces to turn the tide.

On the battlefield, the Israeli forces crossed the Suez Canal, encircled the Egyptian Third Army and pushed toward Damascus on the Syrian front. The United Nations Security Council adopted Resolution 338 on October 22, calling for a cease-fire, and fighting continued for a few days beyond it, which led to a confrontation between the two superpowers. On October 24 and 25, the Soviet Union hinted at sending its own forces to rescue the Egyptian army, and the United States put its forces on a heightened nuclear alert, known as DEFCON 3. The crisis passed, the cease-fire held and the war ended.

I will not claim that the airlift won the war on its own. Israel's soldiers, officers and its reserve system did that. But the airlift gave them what they needed to keep fighting, and the signal it sent, to Moscow, to Cairo and to Jerusalem, was that America would not let its friend be defeated.

The embargo

Now the cost. On October 16, 1973, the Gulf members of OPEC announced that they were raising the price they charged for oil, a decision they made on their own. Around the next day, the Arab oil ministers meeting in Kuwait announced production cuts, five percent at first and a further five percent each month until their political aims were met. When Nixon asked Congress, on October 19, for a large emergency military aid package for Israel, the response from the Arab producers was swift. Saudi Arabia announced a total embargo on oil shipments to the United States, most other Arab producers followed, and the embargo was later extended to the Netherlands and some other countries seen as friendly to Israel.

The effects were large. The posted price of oil rose roughly fourfold between October 1973 and early 1974. America at that time imported a significant and growing share of its oil. Domestic production had reached what was then its high point in 1970, and consumption had kept growing. The country was exposed, though few people had noticed.

The embargo officially lasted until March 1974, ended after Kissinger's diplomacy produced disengagement agreements between Israel and its neighbors. The price shock outlasted it.

The gas lines

Here is where conservatives should be clear about what happened, because the lesson is often told with the wrong villain. The gas lines of the winter were not simply the product of a supply cut. They were also the product of price controls.

In August 1971, Nixon imposed wage and price controls across the economy, and oil prices were among the things held down. When the embargo hit, the controls prevented domestic prices from rising to bring supply and demand into balance. In November 1973, Congress passed the Emergency Petroleum Allocation Act, which put the federal government in charge of deciding how fuel would be allocated across regions and users. The result, I would argue, was a shortage worse than it had to be. Lines formed at stations, and consumers could not buy what the controlled price pretended was available.

That is the classic economic result. A price held below what the market would set creates more demand and less supply. The embargo was a real shock, and it hurt. The queues, however, were made far worse by policy choices. In my judgment the federal government turned a supply cut into a worse shortage by holding down the price signal that would have ordered the scarce fuel.

Other responses followed. In November 1973 Nixon announced Project Independence, a goal of energy self-sufficiency by 1980, which it did not reach. Congress approved the Trans-Alaska Pipeline in November 1973. In January 1974 the national maximum speed limit of 55 miles per hour became law, intended to save fuel. And in December 1975, Congress passed the Energy Policy and Conservation Act, which created the Strategic Petroleum Reserve, a stockpile of crude oil for emergencies. The purpose and misuse of that reserve are told in The Strategic Petroleum Reserve Was Built for War, Not for Gas Prices.

The objection, answered

A fair skeptic of the airlift has an argument. The aid, in this view, was a mistake. It cost America an oil embargo, a recession and a lasting enmity in the Arab world. A neutral policy would have spared the country the pain, and Israel could have fended for itself. The embargo proves that entangling the United States in a regional quarrel carries a price that was not worth paying.

I will answer in order.

1. The embargo was a choice made by others. Producers decided to use oil as a weapon. America did not cause that choice. The lesson of a bully's behavior is that he must be answered, not appeased.
2. The price of abandoning an ally is also real. A United States that watched Israel be overrun in 1973, after supplying it with arms, would have sent a signal to every ally and every adversary. Soviet-backed clients would have been rewarded. The credibility cost would have been large, and it would have been paid for decades.
3. The embargo ended. The strategic aims of the embargo, to force America to abandon Israel, failed. America did not abandon Israel, and the producers lifted the embargo without achieving that goal.
4. The deeper vulnerability was our own. The reason an oil embargo hurt so much was that America had let its energy position erode, as production hit its then-high point and demand grew, and then compounded the problem with price controls and rationing. The solution is not to be less loyal to friends. It is to be less exposed to foes.

That fourth point is the second lesson, and it is the one that has lasted. A country that can produce its own energy cannot be held hostage by those who sell it. This is the argument for American production, for pipelines, for a diverse energy mix and for a reserve that is kept for emergencies. It has nothing to do with the daily price at the pump and everything to do with whether a foreign government can choose to switch off the lights.

The Founding angle

The Constitution's Preamble speaks of providing for the common defence and securing the blessings of liberty, and the Founders understood that national power rests on an economy that is not at the mercy of others. Hamilton's arguments for American manufacturing, made in his 1791 report to Congress, rested on the claim that a nation must be able to supply itself with essential goods, especially in time of war. The idea that independence is more than a political fact, that it requires the means of self-supply, was part of the nation's thinking from the start. See The Defense Production Act of 1950 Is a Wartime Tool with Peacetime Habits for how a later generation tried to put that principle into law.

How the two lessons connect

It is worth putting the two lessons together. They are really one lesson seen from two sides. America backed a friend, and its dependence on others' oil exposed it to retaliation. The answer to that exposure is not to stop backing friends. It is to reduce the leverage others hold over us. The airlift showed America at its best: fast, decisive and generous. The embargo showed an America that had let a vital interest drift into someone else's hands.

The same pattern shows up in the larger story of the alliance, a subject weighed on its merits in Is the Alliance with Israel a Burden or a Bargain, the Ledger Examined, and in the earlier Israeli decision to prevent an enemy from acquiring a weapon, covered in Israel Bombed Osirak in 1981 and the World Later Thanked It in Private. And the principle that credibility depends on being willing to pay a price is the subject of Deterrence Fails When an Enemy Thinks You Will Not Pay the Price.

One wry observation to finish. The 1970s produced an astonishing amount of government ingenuity directed at the gas line, including odd-even rationing by license plate, and almost none directed at the pump's actual problem, which was that the price had been told not to move. It is a good example of the principle that the surest way to get a shortage is to make a rule against it. And the sign on the closed station, "no gas," was perhaps the most honest economic statement the federal government of that era ever produced, since it came with no spin at all.

The case in brief

1. Operation Nickel Grass delivered roughly 22,000 tons of materiel by air to Israel after the surprise attack of October 6, 1973, and gave Israel the means to keep fighting.
2. Portugal, almost alone among the European allies, let American planes use the Azores, which shows how unevenly an alliance's burdens are carried.
3. Arab oil producers answered with an embargo and a fourfold price rise, and the gas lines were worsened by American price controls and allocation rules.
4. The embargo failed to separate America from Israel, but it exposed an energy dependence that had grown unnoticed.
5. Both lessons hold: help a friend in time, and never let a hostile seller hold the veto over your economy.

What you can do: look up your state's and your country's sources of energy through the public data on the Energy Information Administration's website, and ask your representative what they have done to lower America's exposure to hostile suppliers.