142
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
In the meantime, the Amir of Kuwait, Sheikh Ahmad, witnessed
the events in Bahrain and Saudi Arabia and also decided that oil
was to be a large part of his country's future. In quick succession,
oil was struck in Kuwait on February 28,1938, followed in March
by discoveries in Saudi Arabia, and, in April 1939, King Ibn Saud
opened the pipeline feeding the terminal at Ras Tanura and oil
flowed to a waiting Socal tanker.
Unfortunately, the best-laid plans were not executed and World
War II caused the cessation of virtually all crude oil production in
the Persian Gulf.
In 1943, President Roosevelt authorized Lend-Lease assistance
to Saudi Arabia to tie US national security to Middle Eastern oil.
Further measures were taken to acquire ownership of foreign
reserves through the newly created government entity known as
the Petroleum Reserves Corporation, but the oil companies reacted
strongly to the idea of nationalization of American corporations
and the plan was abandoned.
Before 1956, Egypt did not possess oil wealth, but it did have the
Suez Canal through which flowed two-thirds of Europe's oil supply.
In 1954, King Farouk was deposed and General Gamal Abdel Nasser
rose to power took on the role of president. The general was faced
with national economic hardship and decided to raise revenues
from transit fees through the canal. This required that he had to get
control of the canal by displacing the Suez Canal Company, which
was not an Egyptian venture but joint venture of Britain and French.
General Nasser often advocated the use of oil as an economic
weapon but failed to garner support from many of the oil-producing Arab countries. After General Nasser died in 1970, Anwar Sadat
ascended to the position President, and, in 1972, he had tried to
induce the oil-producing Arabian nations to use the oil weapon, but
King Faisal of Saudi Arabia disagreed. His rationale was that Egypt
had been politically unstable for some years, and while Egypt was
moving closer to trade and weapons agreements with Russia, the
United States (linked to Saudi Arabia by similar agreements) was
projected not to need Arab oil until 1985; therefore, the oil weapon
would only hurt Saudi Arabia.
As it turned out, by 1973 (more than a decade earlier that projected
by King Faisal), they had become dependent on Middle Eastern oil
by 1973, which placed Saudi Arabia firmly in a position of control
and instituted an embargo because of the support of Israel by the
United States. As a result, the oil weapon fell into place and was
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
In the meantime, the Amir of Kuwait, Sheikh Ahmad, witnessed
the events in Bahrain and Saudi Arabia and also decided that oil
was to be a large part of his country's future. In quick succession,
oil was struck in Kuwait on February 28,1938, followed in March
by discoveries in Saudi Arabia, and, in April 1939, King Ibn Saud
opened the pipeline feeding the terminal at Ras Tanura and oil
flowed to a waiting Socal tanker.
Unfortunately, the best-laid plans were not executed and World
War II caused the cessation of virtually all crude oil production in
the Persian Gulf.
In 1943, President Roosevelt authorized Lend-Lease assistance
to Saudi Arabia to tie US national security to Middle Eastern oil.
Further measures were taken to acquire ownership of foreign
reserves through the newly created government entity known as
the Petroleum Reserves Corporation, but the oil companies reacted
strongly to the idea of nationalization of American corporations
and the plan was abandoned.
Before 1956, Egypt did not possess oil wealth, but it did have the
Suez Canal through which flowed two-thirds of Europe's oil supply.
In 1954, King Farouk was deposed and General Gamal Abdel Nasser
rose to power took on the role of president. The general was faced
with national economic hardship and decided to raise revenues
from transit fees through the canal. This required that he had to get
control of the canal by displacing the Suez Canal Company, which
was not an Egyptian venture but joint venture of Britain and French.
General Nasser often advocated the use of oil as an economic
weapon but failed to garner support from many of the oil-producing Arab countries. After General Nasser died in 1970, Anwar Sadat
ascended to the position President, and, in 1972, he had tried to
induce the oil-producing Arabian nations to use the oil weapon, but
King Faisal of Saudi Arabia disagreed. His rationale was that Egypt
had been politically unstable for some years, and while Egypt was
moving closer to trade and weapons agreements with Russia, the
United States (linked to Saudi Arabia by similar agreements) was
projected not to need Arab oil until 1985; therefore, the oil weapon
would only hurt Saudi Arabia.
As it turned out, by 1973 (more than a decade earlier that projected
by King Faisal), they had become dependent on Middle Eastern oil
by 1973, which placed Saudi Arabia firmly in a position of control
and instituted an embargo because of the support of Israel by the
United States. As a result, the oil weapon fell into place and was