How Britain and the US plunder the Gulf

Fight Racism! Fight Imperialism! no. 97 April/May 1991

For 170 years the peoples of Arabia and the Gulf were slaughtered and suppressed in the interests of British imperial power. The British fleet shelled along the entire coastline of the Peninsula; British troops have poisoned wells, burnt crops, tortured and murdered Arab resistance; the Royal Air Force has bombed villages into oblivion. All of this accomplished by Conservative, Liberal and Labour governments alike with the connivance of Arab ruling classes prepared to sell their people's blood and land for gold.

Initial British interest in the Gulf stemmed from the conquest of India. For strategic purposes the frontiers of India were deemed to extend from the Red Sea to the Straits of Malacca off Malaya. Before the opening of the Suez Canal in 1869 there were three routes to India: around the Cape and into the Indian Ocean; overland via the north Syrian desert, the Euphrates valley and the Gulf; or via Alexandria, the town of Suez and the Red Sea. The nineteenth century British ruling class feared French, then Russian and eventually German encroachment onto these routes and the Indian colony itself. By the 1880s India contained a fifth of Britain's overseas investment and took a fifth of its exports. Lord Curzon and later Winston Churchill maintained that India made the difference between Britain being a first and a third-rate power. To maintain Britain's control over the trade routes required a combination of brute force and financial inducements - bribes.

During 1819-20 British naval forces burned down a string of coastal towns along the Arabian peninsula and sank local fleets, calling them 'pirates' for attempting to retain control over their traditional waters. Trade was seen as a threat and destroyed, along with the Omani Empire that stretched to Zanzibar. Local leaders were forced to sign a 'General Treaty of Peace with the Arab Tribes'. The effect was to secure assurances that Britain could exclude all other foreign powers from the region. Scores of similar treaties were imposed across the region over the next hundred years. In 1839 British troops sent from Bombay attacked and occupied Aden. The following year Hong Kong was taken and the Peninsular and Oriental (P and O) Steam Navigation Company was established. It rapidly became the most successful steamship company in the world converting the Red Sea into a British lake and tying together British trading operations throughout Asia. Disruptions were handled severely: when it was reported that 20 'Christians' had been killed in Jedda in 1858 the Royal Navy bombarded the town for two days until 11 Moslems were yielded up. They were beheaded. The Annual Register recorded the hope that Moslems had been given a lesson 'of the irresistible power of England, which they are not likely soon to forget'.

By the 1870s Britain controlled two-thirds of the Arabian Peninsular's coastline: from Aden, north-eastward to Muscat and Oman, Dubai, Abu Dhabi, Qatar, Bahrain and up to Kuwait. The hinterlands were scarcely developed, there was no colonisation. Apart from the British parts the Peninsular was driven into stagnation and decay. With the decline of the Ottoman Empire British forces moved north and east to occupy Cyprus 1878, Egypt 1882, and southern Persia 1907. When oil spurted out of the Persian ground on 26 May 1908 Britain had in place a regional monopoly and network of political domination over the local feudal ruling classes that ensured an efficient imperialist exploitation of this most valuable new resource.

The US challenge to Britain

The 'lucky strike' was made by the Anglo-Persian Oil Company (later, 1951, BP) using Burmah Oil funds. Anglo-Persian paid £20,000 in cash to the Grand Vizier in Tehran for a concession on an area almost twice the size of Texas. With the defeat of Turkey in World War I, Britain and France started carving up her possessions. The 1916 Sykes-Picot Agreement gave southern Mesopotamia (Iraq) to Britain, the north to France. In 1914 an Armenian businessman, Calouste Gulbenkian, used money from Anglo-Persian (BP), Royal Dutch-Shell and the Deutsche Bank to form the Turkish Petroleum Company (later the Iraq Petroleum Company). The agreement between the parties went into abeyance during the war and in 1919 the German share went to France instead. Despite US resentment the British government argued that the USA had not declared war on Turkey and should be excluded from the oil deal. After the 1922-23 Lausanne Conference Mesopotamia became the British Mandate of Iraq. The British military commander of Baghdad refused to let US oil scouts explore the territory. Consistent US economic and diplomatic pressure finally forced the British to accept US corporate participation in the Turkish/Iraq Petroleum Company. In 1928 Exxon (Esso) and four other major US oil companies gained a 23.7 per cent stake in the company. Thus the US entered into Middle East oil. Iraq was discovered to have some of the largest oil reserves in the world.

In 1931 Standard Oil of California (Chevron) struck oil in Bahrain. Two years later they bought oil concessions in Saudi Arabia for £50,000. Oil production began in 1939. King Ibn Saud rewarded the US firm by extending the concession to cover an area equal to one sixth of the USA.

At the end of World War Two US economic power gave it the means to supplant British imperialism as the dominant force in the Middle East. In 1947 when Britain announced it would have to end its aid to Greece and Turkey the US stepped in with dollars and military personnel. India gained its independence in 1947, Britain could no longer afford the costs of maintaining military forces in the Middle East sufficient to repel all challengers, the Arab rulers were growing richer and intent on wielding a greater measure of state power for themselves and Arab nationalism was on the rise. Indicative was the January 1948 Portsmouth Treaty which replaced the old British military mission in Iraq with a proposed Anglo-Iraqi Defence Board. In practice the Treaty meant that in the event of a threat to BP's interests Britain would send forces into Iraq, the RAF would have access to bases in Iraq should it wish to use them and Britain would train and arm the Iraqi government's forces. The Labour Foreign Secretary Ernest Bevin said the Treaty was 'the beginning of a new series of treaties, regularising and expressing the friendship between this country and the Arab world'. Naturally, it provoked huge riots in Iraq and the British placeman, head of government General Nuri el-Said, was forced to resign. He returned to power the following year. Nevertheless, while British imperialism was intent on holding onto its position in the Middle East it was increasingly less able to do so. The denouement came with Suez in 1956; however it was indicated in Iran in the years preceding it.

In May 1951 the new Prime Minister Dr Mossadeq, leader of the liberal bourgeois nationalist National Front, announced the nationalisation of the Anglo-Iranian oil Company. British Labour Prime Minister Atlee asked the Chiefs of Staff to draft a plan to occupy the main AIOC refinery at Abadan. The US opposed the plan and it was shelved. The AIOC organised a world-wide boycott of Iranian oil which was backed by a Royal Navy blockade of the Gulf.

Abadan's refinery was the largest in the world, supplying oil to the US forces in the eastern hemisphere. Forty per cent of total production of aviation fuel outside the socialist countries came from the Abadan refinery. Iran accounted for over a third of Middle East oil supplies. The loss of output that resulted from Britain's conflict over the nationalisation damaged the US military campaign in Korea. British military intelligence officers approached the CIA to devise jointly a plot to overthrow Mossadeq.

Between 1942 and 1948 the Iranian armed forces were under the command of US Brigadier General Norman Schwarzkopf (father of 'Stormin' Norman). Schwarzkopf returned to Iran and made contact with officers friendly to the USA. Several hundred US agents were activated in Tehran. Mossadeq was overthrown in a coup on 19 August 1953. The Shah was restored to the Peacock Throne behind which stood the US rather than the British embassy.

British imperialism had been too weak to act effectively alone and the dispute over nationalisation was a nuisance to the USA. After the coup the US oil transnationals joined BP in control of Iranian oil

During 1955 British-recruited and led forces clashed with Saudi-backed forces at Buraini Oasis on the borders of Oman and what is now the United Arab Emirates. The Saudi forces were US-equipped and fighting in the interests of the US-owned Aramco company. Accusations flew back and forth between the contending powers about bribing sheiks (the British termed them 'annual subsidies'). Foreign Secretary Harold Macmillan said the oasis was 'vital to our interests'. The Saudi forces were expelled with two SAS squadrons and BP not Aramco gained two-thirds of Abu Dhabi's oil.

In October the following year British forces, with French and Israeli support, attacked Egypt, which had nationalised the Suez Canal. The British government intended to remove Gamal Abdul Nasser's government and seize back the Canal. US imperialism, alarmed at the revolt provoked by the British action that swept across the Arab nations and intent on enforcing its regional dominance to secure a steady flow of oil, acted swiftly. The US Federal Reserve Bank sold sterling and in one day a sixth of Britain's gold and dollar reserves vanished as the Bank of England tried to defend the pound. The US forced a humiliating end to the invasion: within three months British troops had departed and Prime Minister Anthony Eden resigned. Although the British ruling class surrendered its dominant role to US imperialism it allied with it against the threat of Arab nationalism and communism to British-owned oil supplies.

United States global strategy

In 1950 oil accounted for 27 per cent of world energy demands while in 1973 it had reached 48 per cent. Who controls oil controls much of the world. Between 1937 and 1967 the volumes of West European oil imports multiplied thirty fold, Japanese twenty fold and those of the USA fourteen fold. In 1939 Britain controlled 60 per cent of Middle East oil, the USA just 13 per cent. By 1960 Britain had 30 per cent while the USA had 65 per cent.

In the course of World War Two the US government decided to get its hands on all the means of lifting, refining and distributing oil as an instrument of foreign policy. After 1945 the winning of sources of 'strategic materials' corresponded more than ever before to the military-strategic aims of the USA as the dominant power in NATO.

The Gulf states provide Western Europe with about 40 per cent of its oil needs, Japan 75 per cent and the highest US dependence was around 20 per cent, reached in the 1970s; it is often nearer just 10 per cent. Substantial as US domestic oil reserves are, US consumption of oil 1945-75 grew at approximately twice the rate of US domestic production. To reduce its own dependence on Middle East supplies and thereby increase its manoeuvrability in the region and power over its capitalist allies, the US ruling class diversified its oil supplies to Venezuela, Ecuador, Mexico, Trinidad and Tobago, Nigeria and Indonesia. In particular the Korean War accelerated US control over Canadian oil output: by 1953 the US owned 73 per cent of Canada's known oil reserves. When the Suez Crisis cut Middle East supplies to Western Europe by two-thirds, the US transnationals were able to maintain 90 per cent of normal purchases by their NATO allies by increasing output elsewhere around the world.

Middle East oil proved not only strategically important to the US ruling class but extremely profitable. Low labour costs, plentiful supplies and the terms of local concessions meant that every dollar invested in the Middle East in the 1950s generated three and a half times as much oil as each dollar invested in the Caribbean Basin. The rates of profit of US investment in the Third World reveal the following: in 1966 all industrial investment yielded an average of 17.1 per cent, manufacture 9.4 per cent, oil 25.7 per cent; in 1979 all industries 29.5 per cent, manufacture 13.5 per cent, oil 103.9 per cent. Similar figures obtain for most of the 1970s when the OPEC cartel was supposedly creating an 'energy crisis'; the reality was the super-profits of the US and British transnational corporations' cartels.

US Central Command

As the Vietnamese drove on to victory, a revolutionary wave covered 14 countries in the period 1974-80. Included among the victories which the US saw as specifically threatening its hold on oil were Nicaragua, Grenada, Mozambique, Angola, Zimbabwe, Ethiopia, Afghanistan and Iran. Of these only Angola and Iran were oil producers but US imperialism saw its domination of the sea lanes threatened.

In 1977 President Carter announced the formation of a Rapid Deployment Force, to be prepared for instant response to events in the Caribbean Basin and Middle East. A string of forward bases (naval and air) was established in Turkey, Israel, Somalia, Oman, Kenya, Saudi Arabia, Egypt and Diego Garcia. By 1981 US military strength in the Indian Ocean and Gulf exceeded the defence forces of all the region taken together. Plus, nuclear weapons were moved onto Diego Garcia. From January 1983 a permanent US Central Command was established to protect 'vital US interests', consisting of over 350,000 men. Those interests are deemed as covering 19 countries from Morocco to Pakistan. The US ruling class had in place a force intended to maintain its rule over oil and dominance over the Middle East, thereby to sustain its role as the world's major imperial power.

This article was also published as chapter 1.7 of The New Warlords: from the Gulf War to the recolonisation of the Middle East




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