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A brief thread on the History of Oil & the Great Game
However if you will allow me
I will not start w/ John Rockefeller&Standard Oil in 1870s or even Persia in 1900s
I will start in Middle&the collapse of USSR
Ch1: Putin never forgets
@dugalira @andymukherjee70 @ananthng
However if you will allow me
I will not start w/ John Rockefeller&Standard Oil in 1870s or even Persia in 1900s
I will start in Middle&the collapse of USSR
Ch1: Putin never forgets
@dugalira @andymukherjee70 @ananthng
In 1985, a Young KGB Officer in East Germany saw his beloved USSR collapse
He saw what many did not
Communism didn& #39;t end USSR. Saudi Arabia did
The KGB Officer never forgot
Because Putin, neither Forgets nor Forgives
and one day his time would come
He saw what many did not
Communism didn& #39;t end USSR. Saudi Arabia did
The KGB Officer never forgot
Because Putin, neither Forgets nor Forgives
and one day his time would come
However
To see the events in perspective, we need to chart 2 separate stories
The rise of Middle Eastern Oil and the Rise of Putin
and its current cataclysmic intersection
PART 1: of this thread is the Rise of Middle Eastern Oil
To see the events in perspective, we need to chart 2 separate stories
The rise of Middle Eastern Oil and the Rise of Putin
and its current cataclysmic intersection
PART 1: of this thread is the Rise of Middle Eastern Oil
Middle Eastern Oil can be directly traced to the playboy William D& #39;archy and him "wildcatting on a colossal scale in a distant unsettled land" in Persia in 1901
He failed commercially and was bailed out by Anglo Persian (Todays BP) and the British Govt
He failed commercially and was bailed out by Anglo Persian (Todays BP) and the British Govt
In 1908, BP made the first major discovery in the appropriately named "Maidai-i-Naftan", The Plain of Oil
Did this lead to a sudden interest in Middle East oil?
No
Persia / Mesopotamia - Iran / Iraq, wasn& #39;t the the Arabian Pensinsula
Did this lead to a sudden interest in Middle East oil?
No
Persia / Mesopotamia - Iran / Iraq, wasn& #39;t the the Arabian Pensinsula
BP (Anglo-Persian) for one, was convinced there was NO oil in Arabia
In 1926 it said Arabia was "Devoid of all oil prospects"
In fact, Albania was the next hot destination
Most American companies thought the same, with the exception of Gulf Oil and Standard Oil California
In 1926 it said Arabia was "Devoid of all oil prospects"
In fact, Albania was the next hot destination
Most American companies thought the same, with the exception of Gulf Oil and Standard Oil California
They teamed of with Colonel Homes(know as Äbu Naft"- the father of oil) to prospect in Bahrain
Gulf Oil and SoCal would later merge to become part of the modern day Chevron
Gulf Oil and SoCal would later merge to become part of the modern day Chevron
Oil was discovered Bahrain and then Kuwait, there was stiff competition for the right to discover in Saudi Arabia
The British (Anglo-Persian ie: BP) was kept out by Ibn Saud& #39;s chief British oil confidant
Jack Philby
He hated his country & he would transfer his hate to his son
The British (Anglo-Persian ie: BP) was kept out by Ibn Saud& #39;s chief British oil confidant
Jack Philby
He hated his country & he would transfer his hate to his son
His son, Kim Philby, would go on become the most famous double agent of all time
The person who nearly destroyed the British secret service, MI5 and who was immortalised by Le Carre in Tinker Tailor Soldier Spy
The person who nearly destroyed the British secret service, MI5 and who was immortalised by Le Carre in Tinker Tailor Soldier Spy
Largely due to the efforts of the British hating, Jack Philby, Standard Oil California (Chevron) won the first concession
They along with the modern day Exxon, Texaco and Mobil would form Arabian America Oil company or ARAMCO, the main company prospecting Oil in Saudi Arabia
They along with the modern day Exxon, Texaco and Mobil would form Arabian America Oil company or ARAMCO, the main company prospecting Oil in Saudi Arabia
Ibn Saud was always troubled by next door Iran
Shia Vs Sunni
Arab Vs Persian
The enmity was not young
With the ARAMCO deal, Saud bound his country defence with American economic interests
The die was cast. Saudi Oil would from now on also become American Oil
Shia Vs Sunni
Arab Vs Persian
The enmity was not young
With the ARAMCO deal, Saud bound his country defence with American economic interests
The die was cast. Saudi Oil would from now on also become American Oil
To go back a bit...
All these American MNCs can be linked to the birth of Oil
Original Commercial Oil is American & it was discovered in Pennsylvania around 1870
John Rockefeller created Standard Oil, which became the largest player by far, a behemoth, bordering on a monopoly
All these American MNCs can be linked to the birth of Oil
Original Commercial Oil is American & it was discovered in Pennsylvania around 1870
John Rockefeller created Standard Oil, which became the largest player by far, a behemoth, bordering on a monopoly
In fact it became so large, that US Anti Trust broke the company into many pieces in the landmark 1911 Supreme Court Vs Standard New Jersey case
This ruling &the associated Sherman Anti-Trust law are the most important landmarks in global Anti-Trust/Monopoly breaking regulations
This ruling &the associated Sherman Anti-Trust law are the most important landmarks in global Anti-Trust/Monopoly breaking regulations
For a long time US was the dominant producer of oil in the world
Its only real competition was Russia and its Central asian provinces around Baku
In fact the Pioneer of the Russian oil industry was Ludwig Nobel, the brother of Alfred Noble (Noble Prize founder)
Its only real competition was Russia and its Central asian provinces around Baku
In fact the Pioneer of the Russian oil industry was Ludwig Nobel, the brother of Alfred Noble (Noble Prize founder)
Then came the
Dutch east Indies (and the birth of Royal Dutch)
Venezuela
Mexico
and of course the Middle East.
US Share dropped from a nearly 80% to about 25% and in 1960s for the first time became a importer
Dutch east Indies (and the birth of Royal Dutch)
Venezuela
Mexico
and of course the Middle East.
US Share dropped from a nearly 80% to about 25% and in 1960s for the first time became a importer
But we are digressing...
and to get back on track, we need to get back to middle East and the birth of Opec
Oil as a cartel is NOT an Opec invention
In fact the notion OPEC++ has its origins in an 50,000 acres Scottish Castle Estate, called the Archancarry
and to get back on track, we need to get back to middle East and the birth of Opec
Oil as a cartel is NOT an Opec invention
In fact the notion OPEC++ has its origins in an 50,000 acres Scottish Castle Estate, called the Archancarry
In 1928 on banks of the river Arkiag, the top producers had tried to frame rules for the cartelisation of Oil
As today, the only country missing was Russia &the only market excluded was America due to fears of Anti-trust actions
As today, the only country missing was Russia &the only market excluded was America due to fears of Anti-trust actions
Do note, in 1928, Oil production was controlled not by countries but by companies
That would change with the formation of Opec and the effective nationalisation of the global oil industry
Started in 1960,OPEC was the brainchild of Venezuelan Oil Minister,Juan Pablo Perez Alonzo
That would change with the formation of Opec and the effective nationalisation of the global oil industry
Started in 1960,OPEC was the brainchild of Venezuelan Oil Minister,Juan Pablo Perez Alonzo
Alonzo, studied medicine John Hopkins &was a visionary
A leftist he insisted that nations regain sovereign control of oil. However he also saw the wisdom of collaborating with foreign companies
He was also one of the earliest to talk about "resource curse"
A leftist he insisted that nations regain sovereign control of oil. However he also saw the wisdom of collaborating with foreign companies
He was also one of the earliest to talk about "resource curse"
OPEC got off to a slow start
In 1960, Oil production was controlled by Oil MNCs
Countries did not have the right to turn off the taps (with minor exceptions like Mexico)
The just shared in the profits by turning it on
In 1960, Oil production was controlled by Oil MNCs
Countries did not have the right to turn off the taps (with minor exceptions like Mexico)
The just shared in the profits by turning it on
However the wave of nationalism sparked by mainly by Colonel Gamal Abdel Nasser ascendance to power in Egypt, changed all that
Nationalism was the clarion call and one by one, production shifted to the nation state
It was all building up for that one spark
Nationalism was the clarion call and one by one, production shifted to the nation state
It was all building up for that one spark
and the spark was the Yom Kippur war in 1973
On the holiest Jewish day of Yom Kippur, Egyptian and Syrian jets surprised the Israelis
The resultant war, nearly destroyed the Israeli state
Israel clawed back at end, but the damage had been done
On the holiest Jewish day of Yom Kippur, Egyptian and Syrian jets surprised the Israelis
The resultant war, nearly destroyed the Israeli state
Israel clawed back at end, but the damage had been done
And on 16 October, egged on by Anwar Sadat, The Saudi King finally came around and Opec announced that Oil price would be hiked by 70%!
In addition the Saudis stopped all supply of oil to the United States.
The 4 decade old petroleum order was finally dead
In addition the Saudis stopped all supply of oil to the United States.
The 4 decade old petroleum order was finally dead
This is END of Part 1
PART 2 Tomorrow
PART 2 Tomorrow
