Middle East Oil

September 10, 1958

Report Outline
Middle East Oil and Arab Nationalism
Western Development of Mideast Oil
Mideast Gains from Oil Exploitation
Means of Assuring West's Fuel Supply
Special Focus

Middle East Oil and Arab Nationalism

Easing of crisis conditions in the Middle East has relieved in part, but only in part, the anxiety of Western governments over possible interruption to the flow of oil from a region which holds the bulk of the free world's petroleum reserves. The British-French invasion of Egypt in 1956, after President Gamal Abdel Nasser's nationalization of the Suez Canal, showed that Great Britain and France were ready to fight to assure themselves of continued access to Middle East oil. The immediate dispatch of U.S. Marines to Lebanon and of British paratroopers to Jordan, after the successful nationalist revolt in Iraq in mid-July, seemed to show that the United States now attaches the same importance as its North Atlantic allies to maintaining the flow of Mideastern oil.

The new regime in Iraq lost no time in seeking to dispel the fears of Western governments—thus to ward off the danger of direct intervention in the country's affairs. Baghdad radio announced on July 18 that Iraq oil would continue to move to western markets without interruption. Premier Abdul Karim el-Kassem declared, July 22, that “Oil is as important to us as it is to the West and to world economy.” Iraq's new delegate to the United Nations, Hashim Jawad, stated in New York the same day that there would be no nationalization of the petroleum industry and that all contracts with foreign interests would be respected. However, the revolutionary regime is already pressing for more oil production, for more local development of by-products, and above all, for a larger share of the large profits earned by the oil companies.

West's Vital Interest in Mideast Resources

The concern of Western governments is explained by the fact that more than 70 per cent of the oil reserves outside Communist control lie in the region around the Persian Gulf. Since World War II, “the center of gravity of world oil reserves,” as one American oil expert puts it, “has moved from this continent plumb into the Middle East.” Whereas 20 years ago the United States had 59 per cent of proved free world oil reserves and the Middle East only 17 per cent, today the United States has only 14 per cent and the Middle East 71 per cent. Moreover, during 1957, for the first time in 14 years, U.S. production exceeded new discoveries, so that the country's proved oil reserves declined from 30.4 billion to 30.3 billion barrels. In the Middle East, on the other hand, exploration enlarged known oil reserves by about 15 per cent, to nearly 170 billion barrels.

ISSUE TRACKER for Related Reports
Oil and Gasoline Prices
Jun. 22, 2012  U.S. Oil Dependence
Nov. 01, 2011  Future of the Gulf States
Jan. 04, 2008  Oil Jitters Updated
Jul. 2007  Energy Nationalism
Sep. 30, 2005  Domestic Energy Development
Jan. 24, 2003  Oil Diplomacy
Aug. 07, 1998  Oil Production in the 21st Century
Aug. 23, 1991  Oil Imports
Oct. 30, 1987  Persian Gulf Oil
Apr. 04, 1986  Oil Prices
Dec. 23, 1983  Quest for Energy Independence
Sep. 23, 1983  OPEC: 10 Years After the Arab Oil Boycott
May 29, 1981  Western Oil Boom
Aug. 25, 1978  Oil Imports
Feb. 10, 1978  Oil Antitrust Action
Dec. 17, 1976  Alaskan Development
May 17, 1974  Arab Oil Money
Mar. 15, 1974  Oil Taxation
Jul. 18, 1973  Offshore Oil Search
Mar. 28, 1973  Persian Gulf Oil
Nov. 01, 1972  Gasoline Prices
Oct. 14, 1970  Fuel Shortages
Nov. 12, 1969  Alaskan Oil Boom
Dec. 11, 1968  Oil Shale Development
Oct. 26, 1960  World Oil Glut
Sep. 10, 1958  Middle East Oil
Oct. 30, 1951  Oil Nationalization
Aug. 11, 1950  Oil Imports
Apr. 23, 1947  Oil of the Middle East
Jan. 22, 1946  Offshore Oil
Mar. 09, 1944  Oil Supply
Dec. 24, 1935  Oil in World Politics
May 07, 1931  Control of Production in the Oil Industry
Mar. 27, 1929  The Oil Leasing Policy of the New Administration
Jun. 08, 1927  Oil Conservation and Stabilization
Feb. 08, 1926  The Mexican Land and Petroleum Laws
Apr. 18, 1925  The Price of Gasoline
Feb. 11, 1924  Background of the Oil Lease Cases
Sep. 01, 1923  Gasoline
International Energy Trade and Cooperation
Oil and Natural Gas
Regional Political Affairs: Middle East and South Asia