# The Secret WWII Deal to Carve Up the Middle East's Oil — Before the War Was Even Won

https://www.youtube.com/watch?v=sUO9FF1WB20

[00:00] Most wars are remembered for the battles that decided them, the generals who led them, the soldiers who bled in them.
[00:05] But some of the most consequential moments of the Second World War didn't happen on any battlefield.
[00:10] They happened in boardrooms, on the decks of warships, in the corridors of government buildings where men in suits decided who would own the future.
[00:16] Because while millions of young men were dying in trenches, and on beaches across Europe and the Pacific, a very different kind of war was being fought in parallel.
[00:23] A war without bullets.
[00:25] A war over something far more valuable than territory.
[00:27] A war over oil.
[00:30] And the men who fought that war, they weren't interested in liberating nations.
[00:33] They were interested in securing the single resource that would define who controlled the 20th century and everything after it.
[00:38] This is the story of how the United States and Great Britain, while publicly allied in a fight against fascism, were privately engaged in one of the most ruthless geopolitical chess matches in modern history.
[00:49] A match to carve up the oil reserves of the Middle East between them before the last shots of the war had even been fired.
[00:55] And the consequences of what they agreed to, often in secret, often without the knowledge of the.
[01:01] People whose land sat on top of that oil are still shaping the conflicts, the alliances, and the power structures of today.
[01:06] To understand how the Middle East became the prize and a game played by Western powers, you have to go back before the Second World War.
[01:12] You have to go back to the moment when oil stopped being a curiosity and became the blood of modern civilization.
[01:17] In 1911, Winston Churchill made a decision that would quietly reshape the trajectory of the entire 20th century.
[01:23] As first lord of the admiral, Churchill decided that the British Royal Navy, the most powerful military force on Earth at the time, would convert from coal powered ships to oilpowered ships.
[01:34] Coal was abundant in Britain, and it had fueled the empire's dominance for over a century.
[01:39] But oil was superior in every measurable way.
[01:41] It burned hotter.
[01:43] It produced more energy per unit of weight, and it allowed ships to travel further without refueling.
[01:47] Oilpowered vessels could be refueled at sea, and they required fewer crew members to operate.
[01:52] The strategic advantages were overwhelming.
[01:54] But there was a problem.
[01:56] Britain had mountains of coal.
[01:58] It had almost no oil.
[01:59] And so.
[02:01] Churchill's decision created an existential dependency.
[02:05] The British Empire now needed a reliable, affordable, and politically secure supply of petroleum.
[02:10] And it needed it from somewhere else.
[02:12] That somewhere was Persia, what we now call Iran.
[02:15] In 1914, just before the outbreak of the First World War, the British government purchased a controlling stake in the Anglo-Persian oil company for roughly 2.2 million.
[02:25] This wasn't just a business investment.
[02:26] It was the British government becoming a direct owner and operator of a foreign oil company with all the geopolitical entanglements that came with it.
[02:34] The company would later be renamed the Anglo-Iranian Oil Company and eventually it would become British Petroleum or BP.
[02:41] But at its origin, it was a state-backed instrument of imperial power designed to keep the Royal Navy fueled and the empire afloat.
[02:46] The First World War proved Churchill right.
[02:48] Oil-powered navies were faster, more agile, and more lethal than their coal-burning predecessors.
[02:54] And the war proved something else, too.
[02:56] Oil wasn't just useful for navies.
[02:57] It powered tanks, trucks, aircraft, and the entire logistical backbone of modern warfare.
[03:02] Whoever controlled the oil supply controlled the outcome of the war.
[03:06] And after the armistice in 1918, the victorious powers understood this lesson with absolute clarity.
[03:10] The question was no longer whether oil mattered.
[03:14] The question was who would own it.
[03:16] The collapse of the Ottoman Empire after the First World War left a vast stretch of territory in the Middle East without a clear ruler.
[03:24] And the European powers, Britain and France in particular, moved quickly to fill that vacuum.
[03:28] The Sykespico agreement of 1916 had already secretly divided the region into spheres of influence between London and Paris.
[03:35] But Sykes Pico was a wartime sketch drawn on a map by two diplomats who had never set foot in most of the territory they were dividing.
[03:41] What mattered more in practical terms were the oil concessions.
[03:45] In 1920, Britain and France signed the San Remo Oil Agreement, which gave France a 25% stake in Mesopotamian oil production, the territory that would become Iraq, in exchange for French diplomatic support for British claims over the oil richch province of Mosul.
[04:01] Germany's share in the Turkish Petroleum.
[04:03] Company, seized as spoils of war, was transferred to French interests.
[04:07] The Americans, who had been largely excluded from Middle Eastern oil development up to that point, were furious.
[04:10] Washington insisted on an open door policy, demanding equal access for American companies to compete for foreign oil concessions, regardless of national origin.
[04:20] The British initially resisted, but they eventually conceded, understanding that antagonizing the rising American industrial power was not in their long-term interest.
[04:30] This tension between British dominance and American ambition in the Middle East would define the next three decades of oil politics and it would reach its climax during the Second World War.
[04:39] In 1928, a year that would prove to be one of the most consequential in the history of global energy.
[04:43] Two secret agreements were signed that together created the architecture of an international oil cartel.
[04:49] The first was the Red Line Agreement signed on July 31st in the Belgian coastal city of Oend.
[04:56] The partners in the Turkish Petroleum Company which included Anglo Persian Oil, Royal Dutch Shell, the French company Frances de Petrol and the
[05:03] American Near East Development Corporation representing Standard Oil of New Jersey and Sakone Vacuum agreed to a self-denial clause.
[05:09] None of the partners could independently pursue oil concessions within a territory demarcated by a red line drawn on a map.
[05:17] That territory encompassed the former Ottoman Empire, including Iraq, Syria, Lebanon, Palestine, Jordan, and much of the Arabian Peninsula.
[05:23] The only significant exclusions were Kuwait and Iran.
[05:26] The man credited with drawing that line was Kala Gumankian, an Armenian oil broker who held a 5% stake in the consortium and who was known throughout the industry as Mr. 5%.
[05:37] According to his own account, Genian took a red pencil and traced the boundaries of the old Ottoman lands on a map, declaring that everything inside the line was to be developed jointly or not at all.
[05:44] It was, in effect, the birth of a cartel.
[05:47] No single company could break ranks and pursue its own deals within that vast territory without the consent of all the others.
[05:54] The second agreement signed just weeks later was even more secretive.
[05:56] In August of 1928, the heads of the three most powerful oil companies in the world gathered at a castle in the Scottish.
[06:05] Highlands.
[06:05] The host was Henri During, the ruthless and flamboyant chief of Royal Dutch Shell.
[06:09] His guests were Walter Teagle of Standard Oil of New Jersey and Sir John Cadman of Anglo Persian.
[06:15] Officially, they were there for a grouse hunting holiday.
[06:17] In reality, they were there to divide the world.
[06:19] The agreement they produced, known as the Asis agreement or the Acticare agreement, established seven principles designed to eliminate what the companies called excessive competition.
[06:28] In practice, this meant fixing prices, dividing global markets, and limiting the expansion of production capacity.
[06:35] Each company would maintain its existing share of the global market, and any growth in demand would be divided proportionally among them.
[06:42] New facilities would only be built if demand required it.
[06:44] And most critically, production from low-cost regions like the Middle East would be deliberately restrained to protect the profitability of higher cost production in the United States and elsewhere.
[06:53] The public would not learn about the Acne Agreement until 1952, when a report by the United States Federal Trade Commission exposed it.
[07:01] By then, the cartel had been quietly shaping global oil markets for nearly a quarter of a century.
[07:06] Century.
[07:09] The FBI director J. A. Edgar Hoover even warned that publishing the report would be favorable to Soviet propaganda.
[07:15] President Harry Truman subsequently called for the end of the criminal investigation.
[07:18] The cartel's existence was acknowledged and then quietly buried.
[07:22] Together, the Redline Agreement and the Actnicary Agreement created a system in which a small number of Western oil companies, later dubbed the Seven Sisters, controlled the exploration, production, pricing, and distribution of oil across most of the non-communist world.
[07:36] The countries that actually sat on top of the oil, Iraq, Iran, Saudi Arabia, Kuwait, and others, had almost no say in how their most valuable resource was extracted or sold.
[07:46] They received royalties, often poultry ones, and watched as foreign companies shipped their wealth overseas.
[07:51] This was the world that existed when the Second World War began, and this was the system that the war would simultaneously depend upon and threatened to destroy.
[07:59] When the Second World War erupted in 1939, oil immediately became the most critical strategic commodity on the planet.
[08:05] Every tank that rolled across a battlefield,
[08:07] Every aircraft that took to the sky, every warship that patrolled the oceans, every supply truck that kept armies fed and armed, all of it ran on petroleum.
[08:16] The war was, in a very real sense, a war about oil and a war fueled by oil.
[08:21] The United States was the world's largest oil producer at the time, and it bore an extraordinary burden in supplying the Allied war effort.
[08:28] American oil companies working under the direction of the Petroleum Administration for war led by Secretary of the Interior Harold Eckis supplied an estimated 6 billion barrels of oil to Allied forces over the course of the conflict.
[08:40] American refineries produced roughly 95% of all the aviation gasoline used by the Allied air forces and approximately 65% of the total overseas tonnage shipped by the United States for the war effort was devoted to carrying oil and petroleum products.
[08:53] The scale of consumption was staggering and unprecedented.
[08:57] General George Patton's legendary armored advance across France in 1944 was halted not by German resistance, but by the simple fact that his tanks ran out of gasoline.
[09:06] The fuel had to be airlifted.
[09:08] From Normandy hundreds of miles away just to get the Third Army moving again.
[09:12] It was a vivid illustration of a truth that military planners on both sides understood perfectly.
[09:17] You could have the best soldiers, the best generals, and the best weapons in the world, but without oil, you had nothing.
[09:23] The strain on American reserves was immense.
[09:25] The explosive growth in domestic oil discoveries that had characterized the 1920s and 1930s had begun to slow dramatically.
[09:31] New fields were becoming harder to find, more expensive to drill, and smaller in yield.
[09:36] The law of diminishing returns was setting in, and the wartime demand was draining existing reserves at a rate that alarmed military planners and government officials alike.
[09:45] By 1943, a genuine fear had taken root in Washington.
[09:48] The United States, which had been the world's dominant oil exporter for decades, was on a trajectory to become a net importer of petroleum.
[09:56] The implications were terrifying.
[09:57] If America could not fuel its own military from domestic sources, then the security of the nation and of the entire Western alliance depended on access to foreign oil.
[10:06] And the largest, cheapest, most accessible reserves of
[10:09] Foreign oil in the world were in the Middle East.
[10:11] This realization triggered a fundamental shift in American foreign policy.
[10:14] The Middle East, which had been largely within Britain's sphere of influence since the end of the First World War, was suddenly of vital strategic interest to Washington.
[10:22] And the men who recognized this shift earliest and moved most aggressively to capitalize on it were not generals or admirals.
[10:29] They were oilmen, diplomats, and a canankerous secretary of the interior named Harold Icks.
[10:33] Icks was a complicated figure, a progressive Republican who had joined Franklin Roosevelt's cabinet.
[10:39] He was combative, self-righteous, and relentlessly ambitious.
[10:43] He had been appointed petroleum coordinator for national defense in May of 1941, even before Pearl Harbor, and he took to the role with the fervor of a man who believed he was fighting for the survival of civilization.
[10:54] In a widely read article published in January of 1944 in the American magazine, Ikis declared bluntly that America was running out of oil.
[11:01] He wrote that whoever controlled the world's petroleum resources after the war would control the durability of the peace itself.
[11:08] Hickas' alarm was not.
[11:10] Unfounded.
[11:12] Technical assessments produced by government geologists and military planners painted a dire picture.
[11:17] The United States had been producing oil at a ferocious rate to feed the war machine and the reservoir was running low.
[11:22] Projection suggested that within a generation, America would be dependent on foreign sources for a significant portion of its energy needs.
[11:29] And the only foreign source large enough, cheap enough, and geologically generous enough to fill that gap was the Persian Gulf.
[11:34] This led to what historians have called the conservation theory.
[11:37] The idea was simple but radical.
[11:40] The United States government should actively secure and develop foreign oil reserves, particularly in the Middle East, in order to reduce the drain on domestic supplies and conserve them for future national emergencies.
[11:51] In other words, American policymakers had arrived at the exact same conclusion that the British had reached a generation earlier.
[11:57] The Middle East was the center of gravity for global energy security, and whoever controlled it would control the future.
[12:03] The problem was that the British were already there.
[12:07] The scramble to secure Middle Eastern oil during the war produced one of the most audacious and controversial proposals in American.
[12:12] Government history.
[12:14] The creation of the Petroleum Reserves Corporation.
[12:16] In June of 1943, representatives from the State Department, the War Department, the Navy Department, and the Interior Department met at the White House under the opices of Justice James Burns.
[12:26] The mood was urgent.
[12:28] The men gathered in that room shared a conviction that the United States was facing a petroleum crisis of existential proportions.
[12:34] They agreed on two immediate actions.
[12:36] First, the creation of a government-owned corporation whose purpose would be to acquire foreign oil reserves on behalf of the United States.
[12:43] Second, the initiation of steps to acquire a direct ownership stake in the Saudi Arabian oil fields, the most promising untapped petroleum deposits on the planet.
[12:51] The Petroleum Reserves Corporation or PRC was established shortly thereafter with Harold Ikis as its president.
[12:58] Ikis' ambition was breathtaking.
[13:00] He didn't just want the United States government to support American oil companies operating abroad.
[13:04] He wanted the government to own a piece of the oil itself.
[13:06] Specifically, Iggies proposed that the PRC purchase a controlling interest in the California Arabian.
[13:13] Standard Oil Company, later renamed Aramco, held the concession to explore and produce oil in Saudi Arabia's eastern province.
[13:18] The proposal sent shock waves through the American oil industry.
[13:22] The major oil companies had spent decades fighting against government involvement in their business, and the idea of the federal government becoming a direct competitor, or worse, a controlling shareholder, was anathema to them.
[13:33] The industry mounted a fierce lobbying campaign against the PRC, arguing that government ownership of foreign oil reserves was a form of socialism that would undermine the free market principles that had made America's oil industry the most productive in the world.
[13:46] But Icks had a fallback plan.
[13:48] If the government couldn't buy a stake in Aramco, then it could build a government-owned pipeline from Saudi Arabia to the Mediterranean, ensuring that American oil could flow to European markets without depending on British controlled infrastructure.
[14:00] This proposal, too, was met with furious opposition from the oil industry and from powerful members of Congress.
[14:07] The pipeline plan was eventually shelved, but the underlying strategy remained firmly in place.
[14:10] The United States was going to secure access to Middle Eastern.
[14:14] Oil one way or another.
[14:16] While IKES was battling the oil industry at home, the State Department was engaged in an equally contentious struggle with the British over who would control the post-war oil landscape of the Middle East.
[14:23] The British, for their part, were deeply suspicious of American intentions.
[14:27] They had spent decades building their position in the region, establishing protectorates, cultivating relationships with local rulers, and securing oil concessions that gave British companies dominant positions in Iran, Iraq, and Kuwait.
[14:38] The idea that the Americans, who had barely set foot in the Middle East before the war, might now try to muscle in on British territory was infuriating to London.
[14:46] The Americans, meanwhile, were equally suspicious of the British.
[14:50] State Department officials and military planners feared that Britain was using the war as cover to expand its influence over Saudi Arabia, the one major oil producing country in the region, where American companies, not British ones, held the concession.
[15:03] There were reports that British subsidies to King Abdul Aziz Ib Saud, which had been flowing since the early 1940s to keep the Saudi monarch financially solvent, might come with strings attached.
[15:13] Perhaps Britain.
[15:15] Was trying to win the king's loyalty and eventually displace American companies from the Saudi oil fields.
[15:20] This mutual distrust set the stage for one of the most remarkable diplomatic negotiations of the war, the Anglo-American Petroleum Agreement.
[15:26] In early 1944, President Roosevelt established a cabinet committee to prepare for petroleum conversations with the British government.
[15:33] The committee was chaired by Secretary of State Cordell Hull with Ikis serving as vice chairman.
[15:39] Their mandate was to negotiate a comprehensive agreement with Britain that would govern the development, distribution, and pricing of Middle Eastern oil in the post-war world.
[15:45] The negotiations were complex, contentious, and deeply revealing of the true priorities of both nations.
[15:51] On the surface, Britain and America were the closest of allies, bound together by blood and sacrifice in the fight against Nazi Germany.
[15:59] Beneath the surface, they were engaged in a ruthless competition for control of the single most valuable economic resource on the planet.
[16:05] The American position was clear.
[16:07] Washington wanted to ensure that American oil companies had equal access to British controlled concessions in the Middle East, particularly in Iraq and Iran, where the Anglo-Iranian oil.
[16:16] Company held a virtual monopoly.
[16:18] Americans also wanted guarantees that existing American concessions, most importantly the Aramco concession in Saudi Arabia, would be protected from British interference.
[16:28] They wanted a mechanism to prevent a post-war glut of Middle Eastern oil from crashing prices and destroying the profitability of domestic American producers.
[16:33] The British position was equally clear, if somewhat more defensive.
[16:37] London wanted to maintain its existing concessions and its political influence in the region.
[16:42] The British were acutely aware that their empire was weakening and that the economic strain of the war was eroding their ability to compete with the vastly wealthier Americans.
[16:52] They feared that an open door policy would simply allow American companies with their superior capital and technology to overwhelm British competitors.
[17:00] At the same time, the British recognized that they could not afford to antagonize the Americans who were not only their most important military ally, but also their largest creditor.
[17:08] Roosevelt himself captured the essence of the arrangement in a remarkably candid statement to a British ambassador in 1944.
[17:13] He laid it out with the bluntness of a man who knew exactly.
[17:18] What he wanted.
[17:18] Persian oil, he said, belongs to you.
[17:20] We share the oil of Iraq and Kuwait.
[17:23] As for Saudi Arabian oil, it is ours.
[17:26] It was a breathtaking act of imperial cartography, dividing the petroleum wealth of an entire region between two Western powers, as though the people who lived there had no say in the matter, which of course they didn't.
[17:39] The Anglo-American Petroleum Agreement was signed on August 8th, 1944.
[17:41] It called for the establishment of an international petroleum commission with equal representation from both governments tasked with studying global supply and demand, recommending policies to eliminate restrictive trade practices and preparing the groundwork for a broader multilateral petroleum accord.
[17:59] The agreement explicitly respected existing concession contracts and excluded domestic operations from its scope.
[18:04] But the agreement also contained something far more significant than its formal provisions.
[18:08] It represented an implicit understanding between the world's two most powerful nations that the Middle East's oil belonged to them, not to the countries that sat on top of it, not to the people whose land had.
[18:20] Been drilled and piped and pumped for decades.
[18:21] To them, the agreement was, in essence, a post-war partition plan for the most valuable commodity on Earth, negotiated in the corridors of power while young men were still dying on the beaches of Normandy.
[18:32] The timing was extraordinary.
[18:33] The agreement was finalized in June and August of 1944, just weeks after the D-Day landings, while Allied forces were still fighting their way through France.
[18:42] While the outcome of the war in Europe was still uncertain, while the Pacific Pacific War raged on with no end in sight.
[18:47] And yet, even as the blood was being spilled, the diplomats and oilmen were already drawing lines on maps, dividing up the spoils of a victory that hadn't yet been won.
[18:57] The agreement, however, never took effect.
[18:59] It was met with near total opposition from the American oil industry, which saw it as a dangerous step toward government control of petroleum.
[19:06] Domestic producers feared that a flood of cheap Middle Eastern oil managed by an international commission would destroy their livelihoods.
[19:14] Independent oilmen, particularly in Texas and Oklahoma, lobbied furiously against ratification.
[19:18] Roosevelt, facing
[19:21] A wall of opposition withdrew the treaty from Senate consideration in January of 1945.
[19:28] A revised version was negotiated later that year, but it too failed to gain ratification.
[19:32] The formal mechanism for Anglo-American oil cooperation collapsed before it could ever be implemented.
[19:37] But the failure of the formal agreement did not mean the failure of the underlying strategy.
[19:41] The oil companies, freed from the constraints of a government-managed system, moved quickly to secure their own positions in the Middle East.
[19:48] And the most consequential of these corporate maneuvers was the dismantling of the Redline Agreement.
[19:53] After the war, Standard Oil of New Jersey and Sakone Vacuum, two of the American partners in the Iraq Petroleum Company, wanted to join Aramco and gain access to Saudi Arabia's enormous oil reserves, but they were bound by the self-denial clause of the 1928 Redline Agreement, which prohibited them from independently pursuing concessions within the former Ottoman territories.
[20:13] Saudi Arabia was inside the Red Line.
[20:15] The Americans needed the agreement to disappear, and they found a convenient legal argument to make it happen.
[20:19] During the war,
[20:21] France had been occupied by Nazi Germany
[20:23] and the French oil company Frances de
[20:26] Petrol along with Gulbenian had
[20:28] technically been classified as enemy
[20:30] interests by the Allied governments. The
[20:32] American companies argued that this
[20:33] wartime designation had invalidated the
[20:36] red line agreement, freeing them from
[20:37] its restrictions. The French and
[20:39] Gulbankian protested furiously, but they
[20:41] were outmaneuvered. Anglo-Iranian and
[20:43] Shell, the other major partners, were
[20:45] bought off with lucrative oil supply
[20:47] agreements that gave them access to
[20:48] Saudi crude at favorable prices. A new
[20:51] heads of agreement was drawn up and the
[20:52] red line was erased. The American
[20:54] companies were now free to join Aramco
[20:56] and they did. By 1947, Standard Oil of
[21:00] New Jersey and Sony Vacuum had purchased
[21:02] stakes in Aramco, joining Standard Oil
[21:04] of California and Texico as the four
[21:06] American owners of the world's most
[21:07] valuable oil concession. The
[21:09] significance of this cannot be
[21:10] overstated. In the space of just a few
[21:12] years, the center of gravity and global
[21:14] oil production had shifted decisively
[21:16] from the Western Hemisphere to the
[21:17] Persian Gulf, and control of that
[21:19] production had passed from a
[21:20] multinational cartel governed by complex
[21:22] interwar agreements to a small group of
[21:25] American companies operating under the
[21:26] implicit protection of the United States
[21:28] government. The age of American
[21:30] dominance in Middle Eastern oil had
[21:31] begun. But the wartime oil maneuvers
[21:34] were not limited to boardrooms and
[21:35] treaty negotiations. They also played
[21:37] out in one of the most dramatic personal
[21:39] encounters of the entire war. On
[21:41] February 14th, 1945, Valentine's Day,
[21:44] President Franklin Roosevelt met with
[21:45] King Abdul Aziz Ibn Sud aboard the USS
[21:49] Quincy, an American heavy cruiser
[21:51] anchored in the great bitter lake of the
[21:52] Suez Canal. Roosevelt was returning from
[21:54] the Yaltta conference where he had met
[21:56] with Churchill in Stalin to discuss the
[21:58] post-war order in Europe. He was gravely
[22:00] ill, his blood pressure dangerously
[22:02] elevated, and he had only weeks to live.
[22:04] But he was convinced that this meeting
[22:05] was too important to postpone. The
[22:07] encounter was shrouded in secrecy.
[22:09] Roosevelt had pledged to Churchill that
[22:11] the United States would not intervene in
[22:12] territory controlled by the British and
[22:14] Saudi Arabia fell within the British
[22:16] sphere of influence. The meeting had to
[22:18] be kept quiet both from the British and
[22:19] from the press. Iban Saud was smuggled
[22:22] aboard the Quincy along with an
[22:23] entourage that included his royal
[22:24] guards, his coffee server, his food
[22:27] taster, and a flock of sheep to provide
[22:28] fresh meat during the voyage. The two
[22:30] men were in many ways mirror images of
[22:33] each other. They were roughly the same
[22:34] age. Both were heads of state carrying
[22:36] enormous responsibilities. Both were
[22:39] physically impaired. Roosevelt confined
[22:40] to a wheelchair by polio. Ibn Saw
[22:43] walking with great pain from wounds
[22:44] sustained in decades of desert warfare.
[22:47] The king later remarked that he and
[22:48] Roosevelt were twins of a sort. Both
[22:50] farmers at heart, both stricken by
[22:52] physical affliction. The meeting lasted
[22:54] several hours and it covered two primary
[22:55] topics. The first was the question of
[22:58] Palestine. Roosevelt, deeply affected by
[23:00] the unfolding revelations of the
[23:02] Holocaust, tried to persuade Ibn Sawud
[23:04] to accept the settlement of Jewish
[23:06] refugees in Palestine. The king refused
[23:08] categorically, arguing that the Arabs of
[23:10] Palestine should not be made to pay for
[23:12] the crimes of the Germans. Roosevelt
[23:14] failed in this diplomatic objective, but
[23:16] he reportedly promised the king that the
[23:18] United States would never take a
[23:19] position on Palestine without consulting
[23:21] the Arabs. It was a promise that
[23:23] Roosevelt's successors would not keep.
[23:25] The second topic was oil. Roosevelt
[23:28] understood that Saudi Arabia's oil
[23:29] reserves were among the largest in the
[23:31] world and that securing American access
[23:33] to those reserves was essential for the
[23:35] long-term security of the United States.
[23:37] The king, for his part, needed American
[23:39] investment and American military
[23:41] protection. His kingdom was poor. His
[23:43] revenue from oil royalties was modest,
[23:45] and he faced potential threats from
[23:47] neighboring states and from the residual
[23:49] influence of the British Empire. The
[23:50] meeting produced no formal agreement, no
[23:52] signed treaty, no binding document, but
[23:54] it established something far more
[23:56] enduring and understanding. The United
[23:58] States would provide security guarantees
[24:00] for the Saudi Kingdom, including
[24:01] military protection and economic aid. In
[24:04] exchange, Saudi Arabia would ensure that
[24:06] American oil companies maintain their
[24:08] privileged access to the kingdom's
[24:09] petroleum reserves. It was the
[24:11] foundation of a relationship that would
[24:12] endure for generations, surviving wars,
[24:15] revolutions, oil embargos, and the
[24:17] profound cultural and political
[24:18] differences between the two societies.
[24:20] Roosevelt died on April 12th, 1945, less
[24:23] than 2 months after the meeting. But the
[24:25] relationship he had inaugurated with Ibn
[24:27] Sud survived him. Within a few years,
[24:30] the king had authorized the construction
[24:31] of a pipeline to the Mediterranean, the
[24:33] establishment of an American air base
[24:35] near the oil fields, and a military
[24:37] training program for Saudi forces. The
[24:39] Security for Oil Compact was
[24:41] operational, and it would become one of
[24:42] the most consequential bilateral
[24:44] relationships in the history of
[24:45] international politics. Roosevelt gave
[24:47] Saul a gift the meeting, one of his
[24:49] spare wheelchairs. For the rest of his
[24:51] life, the king treasured it above all
[24:53] his other possessions. Whenever he took
[24:56] guests through his palace, he would
[24:57] pause before the chair and say, "This is
[25:00] my most precious possession. It is the
[25:02] gift of my great and good friend,
[25:03] President Roosevelt, on whom God has had
[25:06] mercy." It was a poignant gesture
[25:07] between two dying men who had just
[25:09] divided the future of the Middle East
[25:10] between their nations. One would be dead
[25:12] within weeks. The other would rule his
[25:14] kingdom for another eight years, but the
[25:16] deal they struck on the deck of that
[25:18] warship would outlast them both. The
[25:20] wartime scramble for Middle Eastern oil
[25:21] produced consequences that cascaded
[25:23] through the rest of the 20th century and
[25:25] into the 21st. The decisions made in
[25:27] Washington and London during the 1940s.
[25:29] The secret agreements, the corporate
[25:31] maneuvering, the diplomatic bargains
[25:32] created a framework of Western control
[25:34] over Middle Eastern energy resources
[25:36] that the people of the region never
[25:38] consented to and would eventually
[25:39] violently resist. In Iran, the simmering
[25:42] resentment over British control of the
[25:43] country's oil industry erupted in 1951
[25:46] when the democratically elected Prime
[25:48] Minister Muhammad Mossad nationalized
[25:50] the Anglo-Iranian oil company. The
[25:52] British, unwilling to accept the loss of
[25:54] their most valuable overseas asset,
[25:56] enlisted the help of the American CIA.
[25:58] In August of 1953, a joint
[26:01] Anglo-American operation overthrew
[26:02] Mosada and restored the Shaw to power.
[26:05] The oil flowed back to Western
[26:06] companies, now reorganized under a new
[26:08] consortium that included American firms
[26:10] for the first time. The Iranian people
[26:12] were left with a dictator, a secret
[26:14] police force trained by the CIA and
[26:16] Israeli intelligence, and a burning
[26:17] sense of grievance that would eventually
[26:19] fuel the Islamic Revolution of 1979. In
[26:22] Iraq, the Iraq Petroleum Company, the
[26:24] direct descendant of the cartel created
[26:25] by the Redline Agreement, controlled the
[26:28] country's oil production for decades.
[26:30] Iraqi nationalists resented the fact
[26:32] that foreign companies were extracting
[26:34] their most valuable resource and
[26:36] shipping the profits overseas. The
[26:38] resentment contributed to the 1958
[26:40] revolution that overthrew the monarchy
[26:42] and it drove the eventual
[26:43] nationalization of Iraqi oil in the
[26:45] 1970s. In Saudi Arabia, the Aramco
[26:47] concession became the centerpiece of the
[26:49] American Saudi relationship, but it also
[26:51] became a source of tension. Saudi
[26:53] officials grew increasingly frustrated
[26:55] with the disparity between the profits
[26:56] earned by the American oil companies and
[26:58] the royalties paid to the Saudi
[27:00] government. In 1950, under pressure from
[27:02] the Saudis, Aramco agreed and to a 50-50
[27:05] profit sharing arrangement, a landmark
[27:07] deal that would be replicated across the
[27:09] region. But even this concession was
[27:11] partly engineered by the American
[27:13] government, which allowed Aramco to
[27:14] deduct its Saudi royalty payments from
[27:16] its US tax bill, effectively
[27:18] transferring the cost of the arrangement
[27:20] from the oil companies to the American
[27:21] taxpayer. And then there was the
[27:23] formation of OPEC. By the late 1950s,
[27:26] the oil producing countries of the
[27:28] Middle East and beyond were increasingly
[27:30] frustrated by the unilateral price cuts
[27:32] imposed by the Western oil companies. In
[27:34] August of 1960, Standard Oil of New
[27:37] Jersey announced a reduction in the
[27:38] posted price of Middle Eastern crude oil
[27:40] without consulting any of the producing
[27:42] countries. Within weeks, representatives
[27:44] from Iran, Iraq, Kuwait, Saudi Arabia,
[27:47] and Venezuela met in Baghdad and founded
[27:48] the Organization of the Petroleum
[27:50] Exporting Countries. It was a direct
[27:52] response to the cartel system that the
[27:54] western companies had built and it would
[27:56] eventually give the producing countries
[27:57] leverage they had never possessed
[27:59] before. The 1973 oil embargo, the price
[28:02] shocks of the 1970s, the Gulf War of
[28:04] 1991, the invasion of Iraq in 2003,
[28:07] these are all in one way or another
[28:09] echoes of the decisions made during the
[28:11] Second World War. The lines drawn on
[28:13] maps in the 1940s, the deal struck in
[28:15] secret, the resources claimed by foreign
[28:17] powers without the consent of the people
[28:18] who own them. These are the fault lines
[28:20] along which the modern Middle East
[28:22] continues to fracture. What makes this
[28:24] history so unsettling is not just the
[28:25] cynicism of the men who made these
[28:27] decisions, though there was plenty of
[28:29] that. It's the sheer scale of what they
[28:31] accomplished. In the space of a few
[28:33] years, during the chaos and urgency of
[28:35] the greatest military conflict in human
[28:37] history, a small number of politicians,
[28:39] diplomats, and corporate executives
[28:41] managed to create a system of resource
[28:43] extraction and political control that
[28:45] would shape the lives of hundreds of
[28:47] millions of people for generations to
[28:48] come. They did it through secret
[28:50] agreements and backroom negotiations.
[28:52] They did it while wrapping themselves in
[28:54] the language of democracy and freedom.
[28:55] And they did it while the people whose
[28:57] oil they were dividing had no seat at
[28:59] the table. The wartime oil deals were
[29:01] not aberrations. They were the logical
[29:03] extension of a system that had been
[29:05] building for decades. A system in which
[29:07] private capital, state power, and
[29:08] military force were fused together in
[29:11] the pursuit of a single commodity. The
[29:13] men who built that system, Churchill,
[29:15] Roosevelt, Ikis, the executives of the
[29:17] seven sisters, they understood something
[29:19] that most of their contemporaries did
[29:21] not. They understood that in the modern
[29:23] world, oil was not just a commodity. It
[29:25] was power. And whoever controlled the
[29:27] oil controlled the world. That
[29:29] understanding has not changed. The
[29:30] players have shifted. The methods have
[29:32] evolved. The language is different. But
[29:35] the fundamental dynamic remains. The
[29:37] countries that consume the most energy
[29:39] still seek to control the countries that
[29:40] produce it. The deals are still struck
[29:42] behind closed doors. The people who live
[29:45] on top of the oil still bear the
[29:46] heaviest costs of the system built to
[29:48] extract it. The next time you hear about
[29:50] a conflict in the Middle East, a
[29:51] diplomatic crisis, a military
[29:53] intervention, a sanctions regime, ask
[29:55] yourself a question. Is this about the
[29:58] reasons they're telling you? Or is this
[29:59] about what it's always been about?
[30:01] Because if history teaches us anything,
[30:03] it's that when it comes to the Middle
[30:04] East, the real story is almost always
[30:07] underground, buried beneath the sand,
[30:09] flowing through pipelines that stretch
[30:11] from the Persian Gulf to the ports of
[30:12] the Western world, measured not in lives
[30:14] or justice, but in barrels. If you found
[30:17] value in this, please do subscribe and
[30:19] hit the notification bell. These stories
[30:21] take a long time to research and put
[30:23] together, and your support is what makes
[30:25] them possible. Also, if you're
[30:27] interested in how these oil dynamics
[30:28] evolved into the modern petrod dollar
[30:30] system and OPEC's rise to power, I've
[30:33] got a video on that which I think you'll
[30:35] find equally fascinating. Thanks for
[30:37] watching and I'll see you in the next