Oil, Diplomacy and Camp David, 1973–79
The October 1973 Oil Shock
On 17 October 1973, eleven days into the Yom Kippur War, the Arab members of OPEC, organised as OAPEC, agreed to cut oil production by 5% a month and to embargo states that supported Israel. The United States, the Netherlands, Portugal and South Africa were named. Within three months the world price of oil quadrupled, from about $3 a barrel to $12. Petrol queues formed at American gas stations; the United Kingdom imposed a three-day working week; Western European industrial output fell. The oil embargo made the Arab-Israeli conflict, for the first time, a problem the entire world economy could feel.
OAPEC began its production cuts and embargo on 17 October 1973. World oil prices quadrupled within three months. Western recession, petrol queues in the United States and Britain’s three-day week followed, making US administrations far more willing to pressure Israel into negotiations.
Kissinger and Shuttle Diplomacy
US Secretary of State Henry Kissinger had brokered the ceasefire that ended the Yom Kippur War on 25 October 1973. Over the next twenty months he flew repeatedly between Jerusalem, Cairo and Damascus to negotiate disengagement deals between the armies that had stopped fighting but not gone home. The press named the practice shuttle diplomacy. Sinai Disengagement I (January 1974) pulled Israeli and Egyptian forces apart along the canal. Sinai Disengagement II (September 1975) handed back the western Sinai oilfields and created a buffer zone monitored by US technicians. The Suez Canal, blocked since 1967, reopened to international shipping in June 1975. Kissinger had not produced peace, but he had produced motion — and motion was new.
Some students treat the United States and the Soviet Union as background to a regional conflict. The 1973–79 sequence shows the opposite. The oil embargo worked because Western dependence on Saudi crude had been built up during the Cold War oil boom. Sadat’s decision to expel his Soviet advisers in 1972 and pivot to the United States made an Egyptian-American relationship possible by 1977. Kissinger’s shuttle diplomacy could only function because Egypt accepted, for the first time, that Washington and not Moscow held the keys to the Sinai. The Cold War was the road that led to Camp David, not the weather around it.
Sadat in Jerusalem, November 1977
On 9 November 1977 Egyptian President Anwar Sadat told his parliament that he was willing to go to the Israeli Knesset to negotiate. Many at home and abroad assumed it was a rhetorical flourish. Ten days later he flew to Tel Aviv. He addressed the Knesset on 20 November and offered Israel full peace, full recognition and open borders in return for withdrawal from Sinai and a settlement of the Palestinian issue. No Arab head of state had ever visited Israel. Three Egyptian ministers resigned in protest; Saudi Arabia, Iraq and Libya denounced the visit; Syria broke relations with Egypt. Israeli Prime Minister Menachem Begin made a reciprocal visit to Ismailia in Egypt on 25 December 1977. The two leaders had agreed nothing concrete — but the taboo on direct dealings had been broken.
Camp David, September 1978
Negotiations stalled for nine months until US President Jimmy Carter invited Sadat and Begin to the presidential retreat in Maryland. The thirteen-day summit at Camp David began on 5 September 1978. Carter shuttled between Sadat’s and Begin’s cabins because the two leaders refused to share a room after the third day. On 17 September the three signed two framework documents in the White House. The first set out an Egypt-Israel peace based on full Israeli withdrawal from Sinai. The second proposed Palestinian ‘autonomy’ in the West Bank and Gaza, with a five-year transition. Sadat and Begin shared the 1978 Nobel Peace Prize. Carter’s mediation salvaged a deal his advisers had told him was already lost.
Sadat addressed the Israeli Knesset on 20 November 1977. The Camp David Accords were signed on 17 September 1978: a framework for Egypt-Israel peace and a separate framework for Palestinian autonomy. Sadat and Begin shared the 1978 Nobel Peace Prize.
The Treaty of Washington, March 1979
On 26 March 1979 Sadat and Begin signed the Treaty of Washington on the South Lawn of the White House. Egypt became the first Arab state to recognise Israel. Israel committed to phased withdrawal from Sinai by 1982 and to dismantling its settlements there. The Suez Canal was opened to Israeli shipping. Full diplomatic relations followed in February 1980. Egypt received around $1.3 billion a year in US military aid; Israel received around $3 billion. The treaty held: every Israeli soldier and settler had left Sinai by April 1982, on schedule.
Arab Reaction and the Cost
The Arab League suspended Egypt at a Baghdad summit in March 1979 and moved its headquarters from Cairo to Tunis; only Oman, Sudan and Somalia kept full relations with Egypt. The Palestinian autonomy track, which had no Palestinian or Jordanian negotiators, produced nothing — King Hussein refused to be drawn in and the PLO rejected a deal made over Palestinian heads. On 6 October 1981, while reviewing a Cairo military parade marking the 1973 war, Sadat was assassinated by Egyptian Islamist soldiers who regarded the treaty as a betrayal. He was succeeded by Hosni Mubarak, who upheld the treaty for the next thirty years. Egypt was readmitted to the Arab League in 1989; the headquarters returned to Cairo in 1990.
A common student claim is that 1970s peacemaking ‘failed’. The strongest answers separate two tracks. The Egypt-Israel bilateral track succeeded: the treaty was signed, Sinai was returned, the border has been quiet since. The Palestinian track failed: no Palestinians sat at Camp David, the autonomy framework was rejected by the PLO and went nowhere, and the deal arguably let Israel concentrate on the West Bank and Gaza without an Egyptian counter-weight. Show that peacemaking and the wider conflict can run on separate clocks.
Why It Mattered for the 1980s
The 1979 treaty removed the largest Arab army from any future war with Israel. Without Egypt, Syria alone could not realistically open a southern front. Israel was free to invade Lebanon in 1982 in pursuit of the PLO without fearing a two-front war — the next lesson’s subject. Inside Egypt, the treaty bought economic recovery: US aid, the reopened Sinai oilfields and the canal tolls underwrote Mubarak’s long presidency. For the United States, the deal locked Egypt into the Western camp and gave the Carter administration its single foreign-policy success in a presidency otherwise defined by the Iranian hostage crisis. The cost was paid by Sadat himself, by Egypt’s standing in the Arab world for a decade, and by Palestinians whose autonomy framework was never implemented.