The United States, Great Britain and the middle-eastern oil industry, 1945-1960

Abstract

In 1943, the U.S. government tried to purchase the controlling share of an American oil company with holdings in Saudi Arabia. Owning an oil company would ensure future access to petroleum resources in the Middle East when domestic stores inevitably proved inadequate to meet demand. When this endeavor failed and the oil company instead sold those shares to two other major American oil companies, the government was left to forge a new foreign oil policy that relied on private oil companies to extract, refine and transport petroleum products from the Middle East to satisfy U .S. and Allied needs. This policy coincided neatly with the interests of American oil companies keen to exploit recently discovered deposits in the Middle East. Both the United States and the oil companies faced risks associated with an area as politically unstable and technologically backward as the Middle East. To mitigate these risks, the government helped secure and maintain the companies' legal, financial, political and diplomatic positions. On the other side, the oil companies provided access to stable, ample and additional supplies of petroleum in support of U.S. economic, political and foreign policies. The relationship between public and private that emerged, termed "mutual insurance," was of a symbiotic, rather than exploitative nature. This affiliation grew organically, based on the convergent goal of accessing Middle East oil, even though each side maintained its own, discrete objectives. The dissertation explores the development, creation, implementation and eventual termination of this distinct relationship between 1945 and 1960. It utilizes the records of the administrative bureaucracies tasked with designing and implementing U.S. foreign oil policy, the U.S. State Department, the British Foreign Office and the American and British oil companies involved in the Middle East. These sources reveal the government and corporate motivations that shaped this relationship in the Middle East during the early Cold War. Ultimately, this model of mutual insurance led to American economic and political ascendancy over the British in the Middle East, providing fuel for the American century.