Imperialism, oil, and the Arab revolution: Background to the U.S. intervention

Scan page 13

Saturday, Sept. 15 at 8 p.m. 3435 Army St., suite 308, San Francisco 12 SOCIALIST ACTION SEPTEMBER 1990

JEFF MACKLER

Three-quarters of the capitalist world's known oil reserves lie beneath the lands of the people of the Middle East and North Africa.

For over 90 years, world imperialism has fought to divide up this precious resource at the expense of the indigenous people, with U.S. imperialism ruthlessly maneuvering to grab the lion's share.

The 20th-century history of the region— including two world wars, innumerable imperialist-instigated wars between the various Arab nations, and the anti-colonial struggle-is the history of imperialist subjugation and exploitation and the drive of the Arab masses for liberation.

Driven by the need to exercise dominance and control over the single resource which literally turns the "wheels of industry," the giant international oil cartels, owned by the world's leading ruling-class families, have exercised their influence and power to subjugate the people of the Middle East to the interests of capitalist profit.

Oil is the central resource required by advanced capitalist society, accounting in the early 1970s for some 42 percent of the energy needed to run its industry and commerce. By the mid-1970s the Middle East supplied more than 70 percent of the oil consumption in Britain; 80 percent in France; 90 percent in Japan and West Germany; and almost 95 percent in Italy.

Proximity to coastal shipping routes, favorable geographic and climactic conditions, and the low wages of the region's oilworkers make Middle Eastern oil the most profitable in the world.

The Middle East is also the chief supplier to imperialism's military "industry," providing virtually all of NATO's oil today-as it did for the United States during the imperialist war in Vietnam.

To fuel its then worldwide military machine and industrial infrastructure, the British occupied Iran following World War I and again during World War II.

British oil interests in Iran remained dominant until the Shah of Iran was challenged by Premier Mohammed Mossadegh who, the day after his 1951 election, nationalized the British-owned Anglo-Persian Oil Company in order to improve the horrible conditions of life of the Iranian people.

The United States used the occasion to impose a worldwide oil embargo in order to enhance its future holdings in Iran. The result was a reduction in Iran's total oil exprts during the next two years to less than it had exported in a single day, before the embargo.

The United States culminated the punishment of Iran in 1953 with a CIA-engineered coup to return the Shah to power. And following this, it restructured Iran's oil cartel to give U.S. corporations the controlling interest.

When U.S. interests were again threatened following the 1979 popular revolution which again removed the Shah, the United States sought the help of Iraq's Saadam Hussein, who complied by invading Iran in a devastating seven-year war. This resulted in a dramatic drop in Iranian oil production, not to mention the loss of one million Iranian lives and nearly that many Iraqi losses.

A strategy of "pacification"

In a 1971 article published in the International Socialist Review titled "Middle East Oil and U.S. Imperialism," Dick Roberts summarized the sordid history of the competing imperialist powers in the region:

"Oil was first exported from Iran, in the first decade of this century. The giant Abadan refinery, still the largest in the world, had been constructed in Iran by 1912. Since that time oil exports from the Middle East and North Africa have steadily increased as imperialism spread its wells initially westward from Iran to Iraq, then southward into Saudi Arabia and to the other sheikdoms along the Persian Gulf, into the Persian Gulf itself, and finally westward again to Libya and Algeria...

"The First World War had resulted in the balkanization [artificially breaking up into small nations] of the old Ottoman Empire into spheres of British and French military occupation, at the expense of the Arabs who had supported the allied powers during the world war and expected independence afterwards. Arab resistance to British and French imperialism erupted during the interwar period into strikes, demonstrations, and guerrilla warfare.

"The strategy of 'pacification,' [a term used during the Vietnam War as a euphemism for mass murder] which the French government had already employed in its Morocco campaigns at the turn of the century, was employed by French and British armies alike: French bombers and artillery were used against the civilians of Damascus in 1920, again from 1925-1927, and at the outbreak of the Second World War, as well as at its conclusion. The British massacred an Iraq rebellion in 1920. RAF bombers were pounding the nationalists in 1922 while Colonial Secretary Winston Churchill negotiated with Faisal, later appointed Monarch.

"All this time the imperialists were also preoccupied with the "black gold' of Irag and the formation of a consortium to divide this precious spoil of the war."

The Red Line Agreement The leading contenders-the British, French, Dutch, German, and American imperialists—continued to squabble over Iraqi oil until 1928, when the infamous "Red Line Agreement" was reached under which U.S. corporations received some 24 percent of Iraqi oil.

The agreement was so-named because during the negotiations its chief author, the British oil magnate Calouste Gulbenkian, called for a map of the Middle East—a virtual imperialist colony-and with a red crayon marked off the contending areas to the temporary satisfaction of everyone concerned.

The key issue in dispute was whether Kuwait, the fifth largest oil producer in the world today, and the other Arabian sheikdoms would come under the terms of the agreement under which the British sought to maintain their oil hegemony. The Americans were satisfied with the agreement because Gulbenkian marked Kuwait outside the area in dispute, leaving its future open to negotiation by U.S. oil interests.

The British accepted the agreement because virtually everything else-Bahrein, Qatar, the former Trucial Oman, and Saudi Arabia-remained theirs. A few years later, the U.S. ambassador to Britain, the billionaire owner of Gulf Oil, Andrew Mellon, negotiated a deal with the British, giving his company a 50 percent share of Kuwait's oil.

Today's competing claims to Kuwait notwithstanding, U.S. imperialism's claim that they are sending over 250,000 soldiers to the region to uphold Kuwaiti sovereignty, is entirely negated by their historic violation of this right in the Middle East and the world over.

Despite early British domination of Saudi Arabia, the 100 percent U.S-owned Arabian American Oil Company (Aramco) consortium (Standard Oil of New Jersey 30 percent; Standard Oil of California 30 percent; Texaco 30 percent; Mobil 10 percent) established its control over Saudi Arabian oil as well following World War II and the demise of the British Empire.

This was done through the device of massive U.S. government subsidies-through the Lend Lease program—to the Saudi monarchy, with the resulting granting of concessions to U.S. corporations. This deal represents a classic example of the naked use of the financial resources of the U.S. government being used for the interests of its ruling capitalists.

While pre-war Britain controlled 72 percent of the Middle East's oil reserves and the United States an estimated 9.2 percent, by 1967 Britain's holding accounted for only 29.3 percent, with the United States share rising to 58.6 percent.

The world's richest men Dick Roberts cites the Feb. 24, 1969, New York Times in the article quoted above to provide an idea of the return on their "investment" U.S. imperialists expected in the Middle East. Roberts' apt measure is the wealth inherited by the son of the deceased Saudi monarch Ibn Saud:

'The oil 'income' of $300 million a year ... made him one of the world's richest men... His personal household numbered about ten thousand. It was filled with scores of slaves (the country's population of six million includes a half-million slaves) and concubines, bodyguards and pensioners on the King's charity. He had 24 palaces."

The world's oil industry in the 1970s was extremely centralized, with 70 percent of production and 50 percent of refinery capacity in the hands of seven corporations. (Today the number has been reduced to six.) Five of these were U.S.-owned: the other two were jointly held by the British government and private capital (British Petroleum) and by British and Dutch corporations (Royal Dutch Shell).

Ranked in terms of assets, Standard Oil of New Jersey in 1971 was the largest U.S. corporation; Texaco, third; Gulf, fifth; Mobil, seventh; and Standard Oil of California, tenth.

Through a series of concessions, secret agreements, and a network of consortiums, these multinational corporations owned most of the oil in the Middle East. The result was the unimpeded extraction of billions of dollars in profits from oppressed nations in favor of U.S. capital.

Two of the most powerful ruling-class families in the world, the Rockefellers and the Mellons, stand at the top of the world's oil pyramid. By 1971, the Rockefellers, in addition to their controlling interest in such corporations as the Chase Manhattan Bank and the lesser oil concerns, controlled three of the five major U.S. oil corporations. Similarly, the Mellons owned the controlling interest in Gulf Oil.

The combined oil holdings of these two families accounted for a figure approximating the total yearly Gross National Product of Jordan, Kuwait, Lebanon, Saudi Arabia, and Yemen combined!

The influence of the oil families in U.S. politics and foreign policy is directly related to their financial power.

Secretary of State John Foster Dulles, under both Republican and Democratic administrations, was the chief architect for Washington's present military, political, and economic policies in the Middle East. He and his brother Allen were partners of the Wall Street law firm of Sullivan and Cromwell, the major attorneys for Standard Oil of New Jersey. Allen Dulles was CIA director from 1953 to 1961.

Post-war realignments Today, the structure of oil ownership in the Middle East has changed dramatically. The change began with the rise in the colonial revolution following the Second World War and culminated in the last two decades as imperialism's outright "ownership" of its former colonies gave way to newer forms of (continued on page 11)

Socialist Action Forum: Speakers:

Khalil Barhoum, Palestinian professor, Stanford Univ.

Dick Roberts, former editor, International Socialist Review.

Jeff Mackler, National Secretary, Socialist Action.

Scan page 14

(continued from page 8: “Prognosis for world capitalism: New crises, attacks on workers”) ist allies rather than on the independent

----- pull-quotes -----

U.S. Troops Out No Vietnam War

of the Middle East! in the Persian Gulf!