POTENTIAL IMPACT OF AN ARAB OIL EMBARGO
			AND OPTIONS TO LESSEN IMPACT

Potential Scope of an Oil Embargo

-The depth of potential embargo to be considered ranges all of the way from either: 1) threat of embargo, 
2) limitations on production and 3) other "interruptions of supply" all in peace time as well as during a conflict, to: 4) complete embargo of all oil exports.

	--The number of oil exporters who might join an embargo ranges from: 1) Saudi Arabia, Kuwait, iraq. Syria and Libya, to: 2) all Arab countries, 3) intermediate suppliers who are forced to cooperate, 4) plus Iran, and to:5) all members of OPEC (Organization of Petroleum Exporting Countries).


	--The number of oil importing countries who might be directly embargoed ranges from:
	1) Israel alone, to: 2) Israel plus the US, 3) plus the as in 1973-74, 4) plus mild limitations on 	supply to Western Europe and Japan with indirect effects on most other non-communist 			importing countries, and to: 5) complete embargo of US, Western Europe and 
	Japan by all OPEC countries supporting actions or policies of Arab countries against 	Israel.	

- As a practical matter it is assumed that the purpose of an embargo would be support of Arab policy against Israel, rather than an OPEC effort to sustain or raise oil export prices.

	-- Any OPEC effort to sustain or raise oil export prices is most likely to be fought out on economic 	   grounds and might involve possible increased restrictions on supply. Because of production 	   restrictions, Libya's oil revenues of $4 billion now are less than Libya's expected expenditures of about $5 billion.

	--It also is assumed that an embargo in support of Arab policy or actions against Israel would 	  not include all OPEC members.

lmpact of an Embargo

	- The potential impacts	of five levels of possible oil embargo against
	  Israel, the US and US	allies or other supporters of Israel, are
	  considered, including	impacts on NATO Europe, Japan, South Korea, South Vietnam and the less           developed countries (LDCs).

	— Options available to Israel, the US, Western Europe, Japan, Korea,South Vietnam and the LDCs 	  to lessen the impact of an oil embargo are considered.

	--Defensive economic measures (i.e., economic warfare measures) that might be taken by embargoed 	  countries are identified and their potential effectiveness evaluated.

							SECRET