Chapter 239
Chapter 239
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Translator: crow
Chapter Title: Oil Shock
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‘Faster than I expected for the oil embargo to come out.’
In the original history, that measure wouldn’t have appeared until the late 1960s.
As a result, the impact of the oil embargo wasn’t as great as one might think.
It had little effect even in the original timeline, and now that it had come even earlier, there was no way the Arab sanctions would pack much punch.
This was still an era when America boasted the world’s number-one overwhelming oil production.
‘Embargoes can drag on forever, but once they roll out countermeasures like rerouting exports or whatever, it fizzles out quick.’
That wasn’t the real card. Production cuts were the surefire play.
Just sending the message that oil supply would shrink could deliver a shockwave all on its own.
I sent an anonymous letter to Ahmed Zaki Yamani, advisor to the Saudi government.
“Production cuts will be more effective than an embargo. Even a 5% cut per month will send prices skyrocketing, so why not give it a test run.”
The Ahmed Zaki Yamani I wrote to had been Saudi Oil Minister since 1962, the man who would dominate the global oil industry for 24 years.
Even now, without the minister title, he was a heavyweight with serious pull in the Saudi government.
It wasn’t long before OPEC announced oil production cuts.
“We will cut oil production by 5% each month until the West pulls out of the Middle East war.”
The proposal I sent matched exactly the strategy Yamani used to trigger the First Oil Shock.
Put this into action, and the Oil Shock was inevitable.
“Won’t they hurt themselves by cutting production?”
Oil-producing countries basically operated on a revenue model tied to a fixed percentage of production volume.
So, it wasn’t hard to find media outlets calling the producers’ actions idiotic for slashing their own output.
“What the hell are those oil barons thinking?”
But there was one fact they overlooked.
Unfortunately, oil had no substitutes.
When the Seven Sisters cut production under pressure from Arab states, massive waves hit the market immediately.
With absolute supply shrinking, demand began outstripping it.
“What, what? Oil supply’s dropping from next month?”
“Buy now. If we don’t stockpile, we’re screwed.”
A frantic scramble for oil broke out between nations and companies.
Oil firms, who’d been conservatively pricing under government scrutiny, flipped their stance once the game was on.
“We can’t sell at rock-bottom prices like communists in a free market. Let’s raise them.”
With oil companies pushing the price hike, oil rocketed up a steep curve.
“OIL at $1.57 a barrel yesterday, now over $2 overnight? That can’t be right.”
“$2? That’s old news. It’s $3 now.”
“$3 can kiss my ass. It could hit $5!”
Everyone screamed as oil prices soared, but Korea was fine.
We imported oil paid for in won, and we had plenty of our own production too.
‘Worst case, we can always import more from the Soviets.’
I monitored the skyrocketing oil price trends and ordered increased stockpiling.
“Pardon? You want us to stockpile at these prices?”
“It’ll go higher, so buy generously.”
In this atmosphere, I figured $10 a barrel was an easy breach.
Once it hit $10, oil-guzzling America and Argentina’s agriculture would take a massive hit.
In this scenario, the 1962 grain price explosion was basically a done deal.
‘Oil Shock plus Grain Shock.’
In a way, it could sweep the world with shockwaves rivaling war.
‘The crisis might drag on, so we need countermeasures.’
I prepared for a national address after a long while.
“Respected citizens of Korea. Prime Minister Lee Seong-jun here.”
Color TV broadcasts meant fussing with eye lines, which was a bit annoying.
“You’ve seen the news, so you know oil prices are in bad shape lately. They climb every time you blink, and the government’s plenty worried.”
Of course, it was a lie.
I was the one stirring this up—why would I worry?
But with Lee Seong-jun’s well-trained mask on, hiding my true feelings was a breeze.
“The government’s doing everything to secure oil, but coping with rising prices isn’t easy.”
Sure, we’d stockpiled for high-price eras and prepped Petro-Won, but best not to mention that.
Emphasize the crisis so people feel the danger in their bones.
What if unprepared leaders look totally incompetent?
This was a sudden “act of God” situation, after all.
“To get through this, we must conserve energy first. Cut unnecessary electricity use and private car trips as much as possible.”
Here, I proposed an energy-saving campaign.
Truth be told, a little extravagance wouldn’t doom Korea.
Our coffers overflowed with dollars, and we could supply all the oil we wanted.
What I showed was pure theater.
“I’ll lead by example too—no more official cars for me. I’ll bike from the official residence to government offices.”
Even Lee Seong-jun bikes.
But you lot’ll keep cruising in your cars?
Honestly, couldn’t deny that was part of the goal.
I wove in just enough to soothe public gripes, then ended on a hopeful note.
“This crisis won’t last forever. When it ends, Korea will reclaim today’s normal life.”
A leader bowing his head before the crisis, appealing to the people.
Through this image, I wanted the Western world to see Korea feeling the Oil Shock pinch too.
Simple reason.
‘Can’t have Korea looking like it’s always winning.’
Sometimes, show a little failure.
While playing up the drama, I closely watched the Oil Shock’s ripples.
Oil soon broke the psychological $10-a-barrel barrier.
Talk even surfaced that $15 could halt the whole world.
Vehicle traffic visibly dropped in Korea too.
Countries with ample oil, especially America and Korea, fared better.
Korea and America had domestic fields plus oil rerouted through their companies.
Europe was different.
The EEC was helpless against Middle East cuts.
No oil even for more money, so European nations screamed.
“We’re not the ones sanctioning Anglo-America—it’s us they’re hitting! We didn’t side with Israel! Save us!”
Luckily, surging prices stabilized around $12 a barrel.
The savior was Iran.
“We can sell to the international oil market now, right?”
“Sell away.”
With water up to their necks, Anglo-America lifted sanctions on Iran first.
“DUMP IT ALL. Prices are at peak.”
Iran flooded the market with oil it had held back.
“Iran’s selling oil? We can’t lag behind.”
Non-OPEC nations like Malaysia, Brunei, and Indonesia ramped up supply.
“Huh? If those guys flood the market at high prices, we’re the only ones losing from cuts?”
Even a tightly knit OPEC was fundamentally an organization bound by profit.
They couldn’t sit on cuts while others cashed in big.
“Prices are high enough—time to ramp up production.”
“Let’s do it.”
Starting with Saudi, Arab states shifted back to expansion.
Still, prices didn’t crash.
“Who knows when those guys will mess with supply again? We need stockpiles at minimum.”
Fear of OPEC toying with oil kept nations stockpiling furiously.
As long as that fear lingered, the Oil Shock wouldn’t end.
With prices refusing to stabilize, America added muscle to bring them down.
“To stabilize oil prices, the United States will release strategic reserves.”
Oh?
We responded in kind.
“Korea will also release strategic reserves to stabilize oil prices.”
“See? Korea’s always there for America in danger. Way more reliable than those Europeans who can’t even fend for themselves.”
Pro-Korea forces in America blared this in the papers.
But our real intent differed.
The packaging was a noble choice to aid America, but would this Lee Seong-jun risk it just for brownie points?
“We bought low—sell high.”
Buy at the knee, sell at the shoulder.
I just followed solid stock market wisdom.
Of course, while profiting, I didn’t forget to quietly rip off the Arab states behind their backs.
“Truth is, when America released reserves, Korea had no choice. Watching them do it while sitting idle would’ve marked us in Washington, so we had to release ours.”
“We understand Korea’s position.”
Prices slowly descended as Korea and America released strategic reserves.
$12 to $11 took a week, $10 another two.
A gentle decline, but a clear hopeful sign.
The frozen real economy began thawing, regaining vitality.
Korea’s stalled exports recovered.
Growth dipped a bit, but trivial compared to competitors’ hits.
The self-sufficient closed Soviet economy was the exception, of course.
“We’re different. The Soviet Union grows through any crisis!”
The reds charged ahead, untouched by the Oil Shock.
Seeing that, even isolated closed economies had perks.
‘Everything else is pure downside, though.’
I shook off thoughts on commie economics, picked up the documents.