The Oily Americans

Category: Americas, World Affairs Topics: Foreign Policy, Iran Views: 10160

For more than a half-century, American foreign policy dealing with oil has typically been manipulative and misguided, often both at the same time. The pattern of intrigue has ranged from U.S. officials' secretly writing tax laws in the 1950s (so the Saudi royal family could collect more money from the sale of its oil and American companies could write off the added payments on their tax returns) to overthrowing a government that showed too much independence in handling its oil sales. To illustrate the dark side of American oil policy, we offer two tales, stitched together from declassified government documents and oil-industry memos, involving a pair of Iraq's neighbors, Iran and Afghanistan.

The first one begins with the rise of a member of Iran's parliament, Mohammed Mossadegh, an impassioned speaker and popular politician who had long chafed at British domination over his country's oil. The Anglo-Iranian Oil Co., partly owned by the British government and a predecessor of today's British Petroleum, held the concession for all of Iran. It set production rates and prices as well as Iran's token share of the proceeds. Mossadegh sought a fifty-fifty sharing agreement, which was then becoming the common arrangement between other oil-producing countries and U.S. companies. The British refused. In 1951 Mossadegh successfully pushed to nationalize Anglo-Iranian, became Iran's Premier and established the National Iranian Oil Co.

The British boycotted Iranian oil, and the U.S. joined them. No international oil company would buy Iran's oil. The Iranians had no independent system for delivering it. They had no technical skills to produce it, since the British had long relegated Iranian workers to menial jobs. Even when Mossadegh threatened to flood the world with half-price oil, he was able to deliver only a trickle because of the economic blockade. As the Iranian government withered, the Eisenhower Administration cut off foreign aid. Unrest followed, and angry citizens took to the streets. This prompted suggestions that the communists were coming, even though Mossadegh was as anti-Soviet as he was anti-British. On Aug. 19, 1953, after the deaths of about 300 people in street riots, the 71-year-old Premier was overthrown. He was replaced by a retired army general, Fazollah Zahedi. The American-friendly Shah, Mohammed Reza Pahlavi, who had earlier fled the country, returned triumphantly, resumed the throne and reasserted his control.

Media accounts of the coup were seemingly straightforward. The Washington Post reported that Iran had been saved from falling into communist hands and that the communists were blaming Brigadier General H. Norman Schwarzkopf "for alleged complicity in the coup." The paper said Schwarzkopf, whose namesake son would lead U.S. forces nearly a half-century later as they drove the Iraqi military out of Kuwait, had visited Iran "but only to see friends, the State Department said." TIME reported: "This was no military coup, but a spontaneous popular uprising."

It was anything but. When Mossadegh delayed settling with Anglo-Iranian on the takeover of the company, the British approached the CIA with a plan to remove the Premier and get Britain's oil back. The British could not do it alone, since they had left Iran. Allen Dulles, the CIA director, and his brother John Foster Dulles, the Secretary of State, agreed. The Dulles brothers assigned the task of overseeing the clandestine venture to Kermit Roosevelt, a longtime intelligence operative and the grandson of President Theodore Roosevelt.

In the months leading up to the coup, Roosevelt spent much of his time in Tehran, coordinating efforts of CIA agents and Iranian sympathizers. To ensure the cooperation of a then indecisive Shah, the CIA turned to one of his old friends, General Schwarzkopf, who in 1942-48 worked with an internal-security force under palace command that helped the Shah maintain rule.

Dr. Mohammed Mossadegh

The CIA's fingerprints were everywhere. Operatives paid off Iranian newspaper editors to print pro-Shah and anti-Mossadegh stories. They produced their own stories and editorial cartoons and published fabricated interviews. They secured the cooperation of the Iranian military. They spread antigovernment rumors. They prepared phony documents to show secret agreements between Mossadegh and the local Communist Party. They masqueraded as communists, threatened conservative Muslim clerics and even staged a sham fire-bombing of the home of a religious leader. They incited rioters to set fire to a pro-Mossadegh newspaper. They stage-managed the appearance of Mossadegh's successor, General Zahedi, whose personal bank account they fattened.

With Mossadegh gone, British Petroleum returned to the Iranian oil fields. Some newcomers tagged along. They included five American companies, the ancestors of today's ExxonMobil and ChevronTexaco. Meanwhile, the U.S. government opened the foreign-aid spigot. Over the next 25 years, more than $20 billion in U.S. taxpayers' money would pour into a decidedly undemocratic Iran, most of it military aid and subsidized weapons sales for the Shah's armed forces and SAVAK, his secret police. As for American oil companies, they would extract 2 billion bbl. of oil from their new Iranian fields. But the access came with a stiff price tag in U.S. government dollars and Iranian lives. And the Shah's oppression led to the establishment of the first American-hating Islamic republic, when the Shi'ite Muslim clerics duped by the CIA overthrow of Mossadegh masterminded their own takeover in 1979, installing the Ayatullah Ruhollah Khomeini. For two decades and counting, American oil companies have been barred by the U.S. government from doing business with Iran. Now the Shi'ites are seeking to turn Iraq into an Islamic republic.    More >>

But all this was merely the overture to the next U.S. foreign-policy decision rooted in oil. This time the players were the Soviet Union and Afghanistan. In 1977 the CIA sounded an alarm on the Soviets' faltering energy prospects in a secret 14-page memo titled "The Impending Soviet Oil Crisis." The agency concluded that the Soviet Union, which had been self-sufficient in oil, was running out and would soon become a major importer. "During the next decade," the report said, "the U.S.S.R. may well find itself not only unable to supply oil to Eastern Europe and the West on the present scale, but also having to compete for OPEC oil for its own use." Two years later, the Soviets invaded Afghanistan. President Jimmy Carter, concluding that the Soviet army was passing through Afghanistan to seize the Middle East oil fields, sounded a warning: "An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force."

When Ronald Reagan replaced Carter in the White House a year later, he turned up the heat. Administration officials insisted that the Soviet Union's interest in Afghanistan was a prelude to a communist takeover of the Middle East oil fields. The CIA report on the Soviets' running out of oil gave the Reagan Administration the ammunition to secure more money from Congress to arm Afghan insurgents and establish a permanent military presence in the Persian Gulf. Soon after Reagan took office, Defense Secretary Caspar Weinberger announced that it was essential for the U.S. to establish bases in the Persian Gulf region "to act as a deterrent to any Soviet hopes of seizing the oil fields." The Reagan Administration began building those bases, sold sophisticated AWACS planes to Saudi Arabia, and conducted joint military exercises with Egypt and other countries. And the CIA began one of its longest and most expensive covert operations, supplying billions of dollars in arms to a collection of Afghan guerrillas fighting the Soviets. The arms shipments included Stinger missiles, the shoulder-fired, antiaircraft weapons that were used with deadly accuracy against Soviet helicopters and that are now in circulation among terrorists who have fired such weapons at commercial airliners. Among the rebel recipients of U.S. arms: Osama bin Laden.

At the same time the U.S. was moving into the Persian Gulf militarily and supplying Afghan rebels, all based on a faulty CIA oil assessment, it was also secretly supporting Saddam Hussein. The Reagan Administration remained neutral after Iraq's invasion of Iran in September 1980, but as the war progressed and it appeared that Iran might emerge victorious, the U.S. secretly backed Iraq, according to declassified government documents. That began in 1982, when the State Department removed Iraq from its list of countries supporting terrorism. According to a General Accounting Office report, this "made Iraq eligible to purchase aircraft, helicopters, and national security controlled items for military end use." Yet another declassified State Department document makes clear that the Reagan Administration intended to implement regulations that would lift restrictions on exports "to both Iran and Iraq of five chemicals that could be used in chemical weapons production." This made sense, as the U.S. was peddling arms to Iran as well via the Iran-contra conduit.

The root of all this folly was the U.S. government's officially sanctioned version of faltering Soviet oil production, which was at odds with reality. To be sure, Soviet oil production was trailing off. But the Soviets were not running out of oil. Nor would they become dependent on imports. Rather, they were using primitive technology and needed to make investments in their infrastructure. In fact, Russia today is the world's second largest producer, after Saudi Arabia. Instead of becoming a major buyer of middle east oil, as the cia had warned, Russia ships 3 million bbl. A day to other countries, including the U.S.

As all this makes clear, the former Soviet Union was not running out of oil. Neither is the world. The one exception: the U.S., which was the Saudi Arabia of the first half of the 20th century, is finally running out. As a result, thanks in part to American policy that put an emphasis on foreign intervention rather than domestic conservation, Americans are more dependent than ever on imported oil.

Source: Time

  Category: Americas, World Affairs
  Topics: Foreign Policy, Iran
Views: 10160

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Older Comments:
Funny how americans will not be seen commenting on this article. When they do they will be like Ian. He is justifying the american crimes in Iran because Armerica is a economic success! Lets see America has a right to change a govt in another country and kill people around the world because it is a success story. Looks like Americans belive that they are indenspensiable people around the world so what ever they do can be justified becuase "they provide immense benfiit to various nations" Probably americans forget that europe as whole is just as big as america financialy so what is unique about america. europe and japan are quite big in their own right. Now China can say that since it provides most of the products in the super market shelves of US it can take over tiwan and kill a few millon people there.
It is a wonder how people can come up with supid justifications for evading criminal responsiblity. I wonder what Ian will say if china bombs an american city and asks to be excused because it supplies most of the proudcts on US's supermarket shelfs!!
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This article does not leave room for any improvements at all: informative yet entertaining.
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It is painful seeing people ("Inteligence") sit down crack their brains on how to rub people, how to kill innocent man.
It is painful to know that the British and the Americans in particular preaches human equality but they hold thier lives sacred and that of other nationalities know the rest.
The brain these so called "intelligence" have could be chanelled to finding an alternative means of livelihood, and beleive me, they will surely succeed at it. Rather they find it more rewarding killing and exploiting.
I then beging to wonder where the civilization they are talking is? What they are doing all over the world to me is purely uncivilized. To cheat kill for money or material things is to me an uncivilized act. That is really wahat the Western worl are doing! For their fear of the unknown future, they kill, they lie, they do all evil things possible. To me they are not better than Lions fighting for pray. A lion is even better because it will kill only when it is hungry!
Though most of their citizens are not in support of their act, they try hard to paint the picture to suit them. They make people see what they want them see and nothing more.
Let's think human, lets act human, lets live human. A white mans blood is as secread as that of a black man. We all have the right to live in our different countries the way we want not the way people from other countries want.
Let's learn to LOVE our fellow humans. Let's take greed out of our blood and things will be better for the whole world. People may not have excess but we will all be comfortable.
Force can NEVER bring about peace, it will only creat unrest. The strong will not rest, though they will pretend they are. The weak will not rest and they will show their anger.
But can be true love only if we beleive Him and follow his laws. He is the one. He is ALLAH. He gives absolute peace. Is that not what we are dying for?
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Salaam alikum ,

I am forced to write again after reading the comment from IAN. I agree with Ian. I have a similar view, there is no such thing as TOTALLY EVIL! This is a doomed republican theory. America is really not all BAD! And I will be very unbiased, neither is Osama Bin Laden. I know this will raise alot of eye brows but some of his points are very valid.

I dont know why a majority of Muslims have such a hard time accepting that America is not all bad. Or all jews are not Zionists! Just a few days back, I had an argument with the Mo3adin of our Masjid who argued all jews are bad. With some there really isnt alot you can argue about. They just dont want to accept the complexity of this world. I want to write more about Jews but thats not the main topic. All I would say is, go study the NGOs in Israel who are standing up for the rights of Arabs (Palestinians). They are jews and they care. SHAME ON THOSE WHO CALL THEMSELVES KINGS AND PRINCE AND CROWN PRINCE!
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Salaam Alaikum.

Wow! This is really an indepth article. I think I would buy some book on Stalin and the Former Soviet. I just bought this book "Beirut to Jerusalem". It is an interesting piece of history.

From this article, I am starting to believe from deep inside that possessing a Nuclear weapon is not an evil thing after all. History has clearly shown this to us that a Nuclear weapon has probably saved more lives than lives that were lost in Japan. It stopped US from attacking Russia or vis-versa, India attacking Pakistan and vis-versa. As for Lebanon, it got attacked by Israel, as for Pakistan in 1973, it was attacked by India, as for Kuwait, it got attacked by Israel, as for Iraq, it got attacked by USA.

With all due respect, I would like to share this view. If you have a typical beautiful wife (which would be OIL) and you are not capable to to flex your muscles (which would be Nukes), dont rely on hopes!

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Hello all,
I enjoyed reading the article and agree with most of its researched content minus the obvious sarcasm and innuendo. However, I think it's important to correct one huge misconception the world has about Americans. We Americans are not our government; a government is its own entity. It's easy to look at America as a needy child stealing from others - but remember we give a lot to others. America is an economic success that many countries (allies and non-allies) enjoy but somehow forget. Let me explain. The need for oil is no different than the need for stability. Without the US economy many countries would suffer poverty and mass starvation because the world operates on a global economy - no country is an island anymore. America and its people are humanitarians at heart - we don't have one religion, we have them all; we don't have one culture, we have them all; we don't have one ideology, we have them all. For America, feeding, protecting and caring for the world takes lots of money, time, foreign policy, and yes OIL. You get many things from oil: plastics, kerosene, propane, fuel-oil, diesel fuel, gasoline, etc. Its these things that makes America's humanitarian ideology work. The basic needs of any people (food, shelter, medicine) supercedes that of any government. Take America away and imagine the billions who would suffer.
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