The main problem facing the United States in the Middle East in the 1950s was how to maintain and defend Western interests in the region in the context of limited military capabilities and declining British power. The possibility of Soviet military action against the region, while always a danger, was not an immediate concern. Rather, the main threat to Western interests lay in instability and the growing anti-Western, particularly anti-British, orientation of Middle Eastern nationalism. US policymakers feared that these problems could provide an opening for the expansion of Soviet influence into the region.
Although the United States and Britain shared the goal of maintaining Western control of Middle East oil, they disagreed on how to deal with nationalism. US policymakers favored a strategy of coopting nationalists by meeting their demands for a greater share in the revenues generated by the oil industry as long as they did not threaten Western access and corporate
39. Anglo-Iranian Oil Company refinery, Abadan, 1955. Nationalization of the British-owned company triggered a CIA coup that had long-lasting consequences.
Control. The British, whose balance of payments and position as a great power were much more directly dependent on Middle East oil, distrusted nationalists and resisted their demands for a greater share of oil revenues. These divergent approaches shaped the US and British responses to the Iranian nationalization of the Anglo-Iranian Oil Company in May 1951.
Anglo-Iranian’s operations in Iran were Britain’s most valuable overseas asset, and the British feared that, if nationalization succeeded, all of Britain’s overseas investments would be jeopardized. Although US policymakers shared British concerns about the impact of nationalization on foreign investment, they also feared that British use of force to reverse nationalization could result in turmoil in Iran, undercut the position ofthe shah, boost the prospects of the pro-Soviet Tudeh party, and might even result in intervention by the
Soviets at Iranian invitation. Moreover, the crisis broke out in the midst of the Korean War, making US policymakers reluctant to risk confrontation. Therefore, the United States urged the British to reach a negotiated settlement that preserved as much of their position as possible. Although US opposition derailed British military intervention, the British organized an international boycott of Iranian oil and intervened covertly in Iranian politics in an effort to reverse nationalization.
US efforts to mediate a settlement failed, as did attempts to convince the shah to remove nationalist prime minister Muhammad Mossadeq. By 1953, the oil boycott had sharply reduced Iran’s export earnings and decimated government revenues. In addition, British and US intervention in Iranian internal affairs exacerbated the polarization of Iranian politics. Finally, the end of the Korean War and the completion of the US military buildup allowed a more aggressive posture toward Iran. Fearing that Mossadeq might displace the shah and that Tudeh influence was increasing, the United States and Britain organized, financed, and directed a coup that removed Mossadeq in August 1953 and installed a government willing to reach an oil settlement on Western terms.
Following the coup, the US government enlisted the major US oil companies in an international consortium to run Iran’s oil industry. Cooperation of the major companies was necessary in order to fit Iranian oil exports, which had almost ceased during the crisis, back into world markets without disruptive price wars and destabilizing cutbacks in other oil-producing countries. The antitrust exemption required for this strategy undercut efforts by the Department of Justice to challenge the major oil companies’ control of the world oil industry and strengthened the hand of the major oil companies, whose cooperation was needed to ensure Western access to the region’s oil.
The new government of Iran also proved willing to cooperate with US plans to set up a regional defense organization. After Egyptian opposition frustrated successive plans to set up a Middle Eastern Command and a Middle Eastern Defense Organization, the United States focused on creating a smaller organization limited to the "northern tier" of countries bordering the Soviet Union plus Iraq. In February 1955, Turkey and Iraq signed a defense agreement known as the Baghdad Pact. Britain joined the pact in April, followed by Pakistan in September and Iran in October. The United States, concerned about Arab reaction, did not join, though US military planners worked closely with pact members.
While the Baghdad Pact focused on the Soviet threat, the Iranian crisis demonstrated that threats to Western access to Middle East oil could come from within the region. In July 1956, Egyptian nationalist leader Gamal Abdel Nasser nationalized the British - and French-owned Suez Canal Company. The Suez Canal was an important symbol of the Western presence in the Middle East and a major artery of international trade; two-thirds of the oil that went from the Persian Gulf to Western Europe passed through the canal. Viewing Nasser’s action as an intolerable challenge to their position in the region, the British, together with the French, who resented Nasser’s support for the Algerian revolution, and the Israelis, who felt threatened by Egyptian support for guerrilla attacks on their territory, developed a complex scheme to recapture control of the canal and topple Nasser through military action. The plan, which they put into action in late October, depended on US acquiescence and US cooperation in supplying them with oil if the canal were closed.770
The Egyptians closed the canal by sinking ships in it, Saudi Arabia embargoed oil shipments to Britain and France, and Syria shut down the oil pipelines from Iraq to the Mediterranean. Incensed by his allies’ deception, concerned about the impact of their actions on the Western position in the Middle East, and embarrassed by the timing of the attack - just before the US presidential election and in the midst of the Soviet suppression of the Hungarian revolt - President Dwight D. Eisenhower refused to provide Britain and France with oil, blocked British attempts to stave off a run on the pound, and threatened to cut off economic aid to Israel. The pressure worked. Following the withdrawal of the British and French forces, the US government and the major oil companies cooperated to supply Europe with oil until the canal was reopened and oil shipments from the Middle East to Europe were restored.
By shutting off the flow of Middle East oil to Western Europe, the Suez crisis highlighted the danger that Arab nationalism posed to US plans to use oil to rebuild Western Europe and ensure its alignment with the United States. Nasser wanted Arab states to use their control of oil to further a political agenda that included Arab unity, the economic development ofresource-poor Arab countries, and the destruction of Israel.771
Without Middle East oil, Eisenhower warned in early 1957, "Western Europe would be endangered just as though there had been no Marshall
Plan, no North Atlantic Treaty Organization.”772 Eisenhower pledged to protect Middle East states from the Soviet Union and its regional allies. To counter Nasser, who received military and economic assistance fTom the Soviet Union, Eisenhower sought to bolster conservative Arab regimes and reinforce their pro-Western alignment through economic and military assistance. Labeled the Eisenhower Doctrine, these policies marked the official assumption by the United States of Britain’s role as the guarantor of Western interests in the Middle East.
The key routes connecting Persian Gulf oil with markets in Western Europe ran through Egypt, Syria, Jordan, and Lebanon. The formation of the United Arab Republic in early 1958, joining Syria and Egypt, seemed to give Arab nationalism the "stranglehold” over access to Middle East oil that US and British policymakers had long feared.773
To make matters worse, the pro-Western monarchy in Iraq was overthrown in a bloody revolution in July 1958. At first, US and British leaders feared that Nasser and, behind him, the Soviet Union, had inspired the coup. They decided not to intervene militarily, however, believing that such action would be counterproductive. The coup had wiped out the royal family in Iraq, and Western intervention could easily radicalize the revolution and inflame the whole region. In addition, the coup’s leaders assured Washington and London that they would respect their oil interests. Instead, the United States and Britain sent troops to Lebanon and Jordan, respectively, and to the Persian Gulf to secure their position in the region and protect access to its oil.
Rather than increasing the threat from Arab nationalism, the Iraqi revolution exacerbated divisions within the Arab nationalist movement and reduced the danger to Western interests in the region. Although Nasser was popular in Iraq, General 'Abd al-Karim Qasim, who emerged as the leader of the revolution, distanced himself from Nasser, withdrew Iraq from the Baghdad Pact, and turned to the Iraqi Communist Party for support. Relations between Qasim and Nasser quickly deteriorated, and Nasser began issuing warnings that Iraq was becoming a tool of the Soviet Union and was undermining Arab unity.
From the US standpoint, either Arab nationalist or Soviet control of Iraq was a threat to US and Western interests. Communist control of Iraq, a Special
National Intelligence Estimate warned in February 1959, would put Soviet influence into the heart of the Middle East, bypassing Turkey and Iran. Arab nationalist control of Iraq could also threaten Western oil interests. Viewing Nasser as the lesser oftwo evils, the United States decided to let Egypt take the lead in opposing Communism in Iraq. The British, in contrast, saw Nasser as a greater danger, and stressed that a revolutionary Iraq split the Arab nationalist movement and lessened its threat to Western oil access.774
The Arab reaction to the Iraqi threat to Kuwait in 1961 underlined how divisions among the Arab states lessened the threat from Arab nationalism. In June 1961, shortly after Britain turned sovereignty over to Kuwait, Qasim revived Iraq’s claim to Kuwait, insisting that it was a province of Iraq. Kuwait was the fourth-largest oil producer in the world in 1961 and the largest single supplier of oil to Britain. Kuwaiti oil could be purchased in sterling and this, combined with British Petroleum’s 50 percent stake in the Kuwait Petroleum Company and the ?300 million in Kuwaiti government investments in Britain, made the small nation very important to Britain’s international financial position. The British, with backing from the United States, took the lead in opposing Iraq’s claim and sent troops to Kuwait to deter an attack. The other Arab states opposed Iraq’s claims, quickly admitted Kuwait to the Arab League, and sent an Arab League Security Force composed of troops from Saudi Arabia, Jordan, the United Arab Republic, and Sudan to defend Kuwait. These forces allowed the British to withdraw their troops while maintaining their economic interests in Kuwait.
In December 1961, the increasingly radical Iraqi government repossessed almost all the territory the Iraq Petroleum Company (IPC) had acquired but not developed. Oil fields in production were not affected, but the IPC’s directors, backed by the US and British governments, refused to accept the unilateral revision of their concession rights. The United States had been considering covert action to remove Qasim. The CIA may have been involved in the bloody coup in February 1963 that eliminated Qasim, brought the Baath Party to power, and led to the repression of the Communists.775
World History
