Sheldon Richman on the discovery of oil in the Middle East and its role in U.S. foreign policy

If the chief natural resource of the Middle East were bananas, the region would not have attracted the attention of U.S. policymakers as it has for decades. Americans became interested in the oil riches of the region in the 1920s, and two U.S. companies, Standard Oil of California and Texaco, won the first concession to explore for oil in Saudi Arabia in the 1930s. They discovered oil there in 1938, just after Standard Oil of California found it in Bahrain. The same year Gulf Oil (along with its British partner Anglo-Persian Oil) found oil in Kuwait. During and after World War II, the region became a primary object of U.S. foreign policy. It was then that policymakers realized that the Middle East was "a stupendous source of strategic power, and one of the greatest material prizes in world history."

Subsequently, as a result of cooperation between the U.S. government and several American oil companies, the United States replaced Great Britain as the chief Western power in the region.  In Iran and Saudi Arabia, American gains were British (and French) losses.  Originally, the dominant American oil interests had had limited access to Iraqi oil only (through the Iraq Petroleum Company, under the 1928 Red Line Agreement).  In 1946, however, Standard Oil of New Jersey and Mobil Oil Corp., seeing the irresistible opportunities in Saudi Arabia, had the agreement voided.  When the awakening countries of the Middle East asserted control over their oil resources, the United States found ways to protect its access to the oil.  Nearly everything the United States has done in the Middle East can be understood as contributing to the protection of its long-term access to Middle Eastern oil and, through that control, Washington's claim to world leadership.  The U.S. build-up of Israel and Iran as powerful gendarmeries beholden to the United States, and U.S. aid given to "moderate," pro-Western Arab regimes, such as those in Saudi Arabia, Kuwait, and Jordan, were intended to keep the region in friendly hands.  That was always the meaning of the term "regional stability."

What threatened American access to the region?  Although much was made of the Soviet threat, there is reason to believe that throughout the cold war Washington did not take it seriously in the Middle East.  The primary perceived threat was indigenous--namely, Arab and Iranian nationalism, which appears to have been the dominant concern from 1945 on.  "The most serious threats may emanate from internal changes in the gulf states," a congressional report stated in 1977.  Robert W. Tucker, the foreign policy analyst who advocated in the 1970s that the United States take over the Middle Eastern oil fields militarily, predicted that the "more likely" threat to U.S. access to the oil would "arise primarily from developments indigenous to the Gulf."  The rise of Arab nationalism or Muslim fundamentalism, or any other force not sufficiently obeisant to U.S. interests, would threaten American economic and worldwide political leadership (and the profits of state-connected corporations).  As Tucker wrote, "It is the Gulf that forms the indispensable key to the defense of the American global position."  Thus, any challenge to U.S. hegemony had to be prevented or at least contained.  As Secretary of State John Foster Dulles said privately during the Lebanese crisis in 1958, the United States "must regard Arab nationalism as a flood which is running strongly.  We cannot successfully oppose it, but we could put sand bags around positions we must protect--the first group being Israel and Lebanon and the second being the oil positions around the Persian Gulf."

~ Sheldon Richman, "'Ancient History': U.S. Conduct in the Middle East Since World War II and the Folly of Intervention," Cato Institute, August 16, 1991, p. 2