The Tyranny Of Oil

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What emerged by early 1947 was a new balance of Middle East oil power in which the Americans held the upper hand, a new system updating Achnacarry by prorating the output of oil gushing up along the Persian Gulf. The American newcomers—Socal, Texaco, and Gulf, with their vast supplies in Saudi Arabia and Kuwait—were admitted to the system, and the position of the longer established internationals, Jersey Standard and Socony, was consolidated. Altogether the spectacle was very much like that of Victorian colonialists dividing up Africa at a European high table, except that the powers at this table were private oil companies. Hitherto oil from the Western Hemisphere had supplied the needs of western Europe. Now, as soon as the seven big sisters controlling Middle East oil—Jersey Standard, Socony, Socal, Texaco, Gulf, Shell, and British Petroleum—got their fields, pipelines, and tanker traffic organized, they would begin to redirect shipments from Venezuela to North American markets, and Middle East oil would supply Europe and Asia.

The scheme was bold, promising huge profits on the cheap Middle East oil. But to succeed it required a climate of reasonably assured peace and order. Here the friendly State Department-oil-company policy came into play yet more decisively. At the moment that Jersey and Socony moved into Aramco, the United States stepped forth as a superpower to create the desired environment. In the shattered world left by history’s most destructive war, American arms would guarantee the peace; emergency American aid would help reconstruct the order.

On February 24, 1947, Secretary of the Navy (later Secretary of Defense) James Forrestal recorded in his diary that Secretary of State George Marshall had shown him a memo

… informing the United States government that Britain could no longer be the reservoir of financial-military support of Greece and Turkey. … Marshall said … that it was tantamount to British abdication from the Middle East with obvious implications as to their successor . …

Within weeks President Truman called for $400 million emergency aid for Greece and Turkey to keep the Russians from moving into the eastern Mediterranean. Proclaiming the Truman Doctrine, he pledged the United States to resist international Communism everywhere. Thus the first big American move of the Cold War took place in the Middle East—and in short order the Sixth Fleet took station in the eastern Mediterranean and the U.S. Air Force flew into bases in Libya, Turkey, and Saudi Arabia where they could help guard Persian Gulf oil.

But the Truman Doctrine was not enough. Important as the Middle East might be to America’s future, it was of secondary interest compared with the preservation of western Europe, which now appeared weaker and more susceptible to Communist infiltration than Truman and his advisers had supposed. On June 5, 1947, only three months after the Greek-Turkish intervention, the American Secretary of State proposed the Marshall Plan.

The Marshall Plan reinforced the meaning of the Truman Doctrine for the American position in the Middle East. One important purpose of the Truman Doctrine was to enhance opportunities for American exploitation of the Middle East by denying the area to Communism; now the Marshall Plan promised to help the war-weakened economies of western Europe by shipping those countries American commodities and other exports they needed for their reconstruction. Prominent among those commodities was oil. Oil was the link between the Truman Doctrine for the Middle East and the Marshall Plan for Europe.

From the time of the Industrial Revolution coal had been the staple of Europe’s economy. But the Second World War left the Continent prostrate; coal was in calamitously short supply. In the emergency America shipped in quantities from across the Atlantic. Still, plants stood idle for lack of coal, and hunger spread across Europe in late 1947 and early 1948.

The trouble with coal, in the Cold War for which America now girded, was that it was a labor-dominated industry. The Marshall planners, looking for a way to put Europe back on its feet and to hold off the Communists, ran up against the hard fact that most of the miners who had to produce the coal for recovery in Britain and France belonged to Communistled unions. The same situation was feared in the western zones of occupied Germany. From the moment in July of 1947 when the Russians walked out of the Marshall Plan conference, battle was joined. In the coalfields the Communists held an almost unassailable position.

 

While officials in Europe faced this intractable problem others in Washington talked about ways for opening up the Middle East. Forrestal, who as a Wall Street investment banker had floated many an oil-company stock issue in his day, lunched with the chairman of the Senate Commerce Committee, Republican Owen Brewster of Maine: I said that Middle East oil was going to be necessary. … Brewster said that he had had a long talk with John D. Rockefeller Jr. … Europe in the next ten years may shift from a coal to an oil economy, and therefore whoever sits on the valve of Middle East oil may control the destiny of Europe.