Tony Cliff

The World Struggle for Oil

(January 1947)

T. Cliff, The World Struggle for Oil, Socialist Appeal, Jan. 1947.
Reprinted in Fourth International, Vol.8 No.6, June 1947, pp.190-191.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The Anglo-Iranian Oil Co. has announced an “Agreement for the Sale of Large Quantities of Crude Oil” to the Standard Oil Co. of New Jersey and the Socony-Vacuum Oil Co. for a period of 20 years.

One of the terms of the agreement is the “prior investigation by the parties of the possibility of constructing a pipeline from the Persian Gulf to the Eastern Mediterranean.”


Vast Resources in Middle East

The oil reserves of the Middle East are tremendous. Although until now less than 150 “wildcat” wells have been drilled in the whole Middle East in order to tap its reserves, in the USA more than twenty times this number are drilled every year. But it is already clear that the Middle East reserves are at least comparable with those of the USA.

According to the reports prepared by experts of the United States Government Petroleum Administration for War (PAW), the Middle East has 30.7 per cent of the total proven oil resources of the world, while USA has 39.6, U.S.S.R. 11.3, Venezuela 11, Netherlands East Indies 18, Mexico 1.2, Columbia 1.0 and Roumania 0.8.

The great resources of the Middle East have hardly been touched. This region, so rich in reserves of oil, produces only 5.7 per cent of world output (1943), while USA produces 66.1 per cent. The output of Middle East oil wells is thus only 0.7 per cent of the proven oil resources in the region, while USA output is 6.3 per cent of its proven oil resources. Other estimates rate the richness of the Middle East countries in oil even higher. According to one, the oil resources in Saudi Arabia alone could satisfy the total world demand for 15 years. The quantity of oil in Iraq or Iran is estimated to be no less than that in Saudi Arabia. E. de Golyer, the noted oil expert, in a report prepared for the United States Petroleum Resources Corporation stated: “The center of gravity of world oil is shifting from the Mexican Gulf and Caribbean area to the Middle East-Persian Gulf area and is likely to continue to shift until it is firmly established in that area.”


Imperialist Interests

The position of the various imperialist Powers differs as regards control of oil in the Middle East. The oilfields of Iran are in the hands of the British alone. The attempts of the USA to acquire a concession over oil in Northern Iran have failed, owing to Russian opposition. The fields of Saudi Arabia on the Persian Gulf, and Bahrein, are in American hands. The USA has also got exploratory leases for areas in Egypt. France has no company of her own, independently active in the field of oil output in the Middle East, but a French company is a partner of the Iraq Petroleum Co. In the Iraq Petroleum Co., two British groups – Anglo-Saxon Petroleum Co. and D’Arcy Exploration Co. – own 47½ per cent of the shares, an American Company – Standard Oil Co. – 23¾ per cent, and a French Company – Compagnie Francaise de Petroles – 23% per cent; the other 5 per cent belongs to a rich Armenian who owns the fields. The Iraq Petroleum Co. has concessions in parts of the Arabian peninsula, including the whole length of the Red Sea Coast; and also in Syria, Lebanon and Palestine. The concession over Kuwait belongs half to the Anglo-Iranian Co. and half to the Gulf Exploration Co., subsidiary to the Gulf Oil Corporation of the USA.

Until now, with the oil wells of Saudi Arabia and Bahrein not developed, England has had a decisive position in the pro. duction of oil in the Middle East, as may be seen from the following figures of the distribution of oil production in the Middle East among the different interests:



Per Cent









There is no doubt that with the increase in the exploitation of the oilfields in Saudi Arabia and Bahrein, the weight of the American companies in the production of oil in the Middle East will grow tremendously. Harold Ickes, American Petroleum Administrator during the war, touched on the crux of the matter when he said: “The capital of the oil empire is on the march to the Middle East. The United States had better move in a big way – and fast.”

Connected with the question of the oil resources of the Middle East is the problem of refining. There are today five refineries in the Middle East; in Abadan (Iran), Haifa, Tripoli, Bahrein and Suez, besides small refineries in Iraq which work only for local consumption. At the moment 80 per cent of the refinery capacity is in the hands of the British, but the position will change with the construction of additional American refineries. One of them, the Ras Tanura refinery, is already nearing completion.


Extension Plans

There is much talk about the extension of the network of pipelines in the Middle East. At the moment only one pipeline exists leading from Kirkuk in Iraq to Haifa. The length of the whole line is 974 miles. There has been talk recently of doubling the carrying capacity of the Iraq-Haifa pipeline by building a line parallel to it. There is also an American plan to construct a new pipeline from Saudi, Bahrein, Quatar and Kuwait to the Mediterranean coast – either to Haifa or to Alexandria. The length of the line to Haifa would be 1,000 miles; this would mean a great reduction in the route of the Arabian oil, since the route around the Arabian peninsula through the Suez Canal is 3,300 miles long.

According to another calculation, if the American plan for constructing this pipeline materializes, it will be necessary to build refineries in Haifa to refine 300-350 thousand barrels a day, i.e., two or three times the output of all the four refineries existing in the Middle East together. The annual output of Haifa will then reach 16 million tons.

The construction of refineries owned by Socony Vacuum, in Tripoli and in the Lebanon is also being spoken about. The new agreement speaks about connecting the oilfields in Iran with the Mediterranean.

It is estimated that the materialization of all the existing oil plans of the American companies and the American Government would cost 300 million pounds. Such a gigantic sum would cause a tremendous economic, social and political change in the Middle East, and would subjugate it entirely to a handful of English and American oil magnates.

For American Imperialism Middle East oil can be one of the most important fields of investment. The great development of American capitalism has deepened manyfold the contradictions within it, and the capitalists will try to overcome them by imperialist expansion on a terrific scale. After World War I the British military authorities in Palestine arrested a geologist employed by the United States Standard Oil Company who had the audacity to discover a source of oil round the Dead Sea. They confiscated his sketches and deported him; today, after World War II, USA’s power compared to Britain’s is too strong for such actions to be taken against her. Ickes declared in unambiguous terms that the stability of the peace depended on agreement being reached about the division of oil resources, and among the matters to be put before the Peace Conference, there was nothing more important than oil. In the tussle over the question behind the scenes of the Peace Conference, the American capitalists, of course, expect to get the lion’s share of the concessions.

The relative weakness of British imperialism compared to American, reveals itself very clearly in all the oil deals in the Middle East. As we have already shown, the American oil companies are taking the biggest part in all the new plans to construct refineries, oil pipelines, etc. The new agreement shows that the American capitalists have entered even the holy of holies of the British Empire, the Anglo-Iranian Oil Co. This agreement is motivated not only by economic, but also by strategical reasons. The concentration of the refineries in Abadan (which today refines about three-fifths of all the Middle East Oil output) will be a drawback, in case of a war with Russia.


Russia and Oil

Middle East oil, particularly that of Northern Iran, plays a great role in the plans of the Stalinist bureaucracy too. This is the result primarily of the tardiness in the execution of the oil extraction plans in Russia. Thus, for instance, the Second Five-Year-Plan set the increase in production from 23.3 million tons in 1932 to 47.5 million in 1937. In fact, it increased only to 30.5 million tons. In 1940 production did not reach more than 35 millions, although the plan laid down a level of over 50 million tons. With these miscalculations, the new Five-Year-Plan sets a more moderate aim for 1950-35.4 million tons. On examining the general plan for increase of production it is clear that oil will be one of the most important bottlenecks in Russia. The Stalinist bureaucracy tries to get over its difficulties – the result of bureaucratic mismanagement, in a simple way: by gaining control of rich new fields.

It is quite clear that the masses in Iran were not very enthusiastic about the Russian-Iranian Agreement, which gave a concession to operate the oilfields in the north of the country to a joint company (Russia to have 51 per cent of the shares and Iran 49 per cent). The Tudeh Party (Stalinist dominated) suffered a great loss in influence through this agreement. The fact that after the unrest among the workers in the oil fields and refineries of the Anglo-Iranian oil company, British imperialism succeeded in strengthening the Shah’s government position, in strengthening the Persian army, in overthrowing the autonomous puppet Stalinist government in Azerbaijan – all go to show that the attitude of the Iranian masses to Stalin’s plans as regards their country is by no means sympathetic. The recent Anglo-American agreement is a new point scored for Anglo-American imperialism in their struggle with Russia.

In the struggle against the American and British oil octopus, the toilers of the Middle East cannot rely on any of the great powers. They can rely only on themselves, on their own strength, and on the help of the millions of fighters for national and social independence of the East and the working class of the West.

The struggle for oil reflects the aims of all the great powers. In their desire to dominate the sources of this important raw material which offers new prospects of enormous profits and wealth to the magnates of Anglo-American imperialism, the seeds of a new world war will be sown. It is oil which is determining the importance of the Middle East in the calculations of all the great powers. And the wealth which will be gained will not benefit the peoples of the Middle East or the masses of the Western powers. It can only lead to the further enslavement of the Arab peoples. Plot and counter-plot, strategic and political maneuvers round this area will be endless. A Socialist Federation of the Middle East in a Socialist World would be the only means of utilizing the tremendous resources of the Middle Fast, as of the world, for the enrichment and benefit of all.


Last updated on 29.10.2005