aaron huffman

Events

Oil Found in Persia

1909

William Knox D’Arcy strikes oil in Persia, importance further cemented when Admiral Fisher proved that warships could run better on oil than coal. Anglo Persian oil established.

Partition of the Ottoman Empire - Britain Hold Kuwait and Iraq - France Holds Syria

1918 - 1922

Several agreements between British and French lead to partition of Ottoman Empire after WWI. Britain establishes firm hold in Kuwait and Iraq. France is given Syria, but receives a cut of British oil. Foreign companies are given limited access to the administered areas.

Red Line Agreement

1928

Red Line Agreement, orchestrated by Gulbenkian, created a Western dominated Oil Monopoly over former Ottoman territories. Forbids independent oil drilling without consent of the British. Greatly restricted early American involvement in Saudi Arabian oil.

Saudi Arabia Oil Awarded to Standard

1932

Jack Philby, after discovering oil in Saudi Arabia, awarded contract to Standard Oil due to his disdain for the British.

Truman Proclaims Middle Eastern Oil Vital

1945

End of WWII, Truman doctrine gives aid to countries fighting Communism and states that Middle-Eastern Oil will become a vital US interest.

American Oil Companies Assume all Aramco Shares

1947

Red Line Agreement ends, despite legal battles American oil companies assume 100% shares of Aramco.

Korean War

1950

Korean War leads to need for oil and fears of Communism taking root in Middle-East leads America to placate an assertive Saudi Arabia by signing Fifty-Fifty agreement in terms of revenue.

Suez Crisis

1956

Suez Crisis. British Empire finally collapses.

OPEC Created

1960

OPEC is created in order to negotiate the price of oil with the West. Initially a toothless organization as their embargo during the six day war has little effect on the West.

Nixon Ends Quota

1969

Nixon ends oil Quotas, which had been in place to protect domestic production, but drying wells made it obsolete. Price of oil was also unshackled as a result and became something determined by the market.

Qaddaffi Seizes Power

1969

Qaddaffi seized power in Libya and forces Occidental petroleum to raise the country’s shares to 55%. This act inspires other OPEC countries to either seek higher shares from the West or outright nationalize their oil. Iran wins complete ownership of oil in 1972, but only does so in name as the country’s operations are still controlled by the British.

Arab - Israeli War

1973

Arab Israeli War. OPEC imposes embargo that sends shockwaves throughout the industrialized world. Hoarding oil happens on a massive scale and American alliances begin to wane as Europe goes out of its way to convince OPEC to lower prices. Victory is short-lived however as OPEC finds out that the embargo created a surplus in their countries and as other countries began to look for alternative oil reserves.

Shah is Toppled

1978

Ayatollah Khomeini seizes power. Although Iran accounted for very little of international oil markets, trauma from 1973 oil shock sends market into a panic.

OPEC Loses Market Edge

1980 - 1989

Iran - Iraq War

1980

Iran-Iraq War breaks out. Further destabilizes oil market.

Third Oil Shock

1985

Third Oil Shock. Lack of centralized pricing mechanisms and rampant speculation in spot markets leads to collapse of oil prices.

George Bush Mediates OPEC

1986

Even amidst turmoil from Iran and Iraq George Bush heads to Middle-East to negotiate OPEC’s resumption of mediator of global oil prices. Quotas were established to avoid oil surpluses and re-integration was implemented, as Saudi Arabia acquired shares of American oil companies.

Iraq Invades Kuwait

1990

Gulf War

1990 - 1991

America invades Iraq - ostensibly defending Saudi Arabia and the key Middle East oil supply