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Oil Relations between the U.S and the Middle East


To understand the American economic heed in the Middle East, we must first understand why it originated. Oil has always been an available natural resource in the Middle East, but it did not influence the economy and politics of several Western nations until the Prime Minister of the United Kingdom, Winston Churchill, decided on having battleships being fueled on oil rather than coal in 1911. This decision had a substantial effect on economic and geopolitical concerns. It guaranteed the significance and achievements of the Anglo-Persian Oil Company, a British company founded in 1908 after the discovery of oil fields in Iran, and ever since then the world has been oil-dependent.


The inception of the United States’ economic involvement in the Middle East dates back to 1928 with the signing of the Red Line Agreement between the world’s large powers (United States, United Kingdom, and France) after the discovery of a large oil field in Iraq. Each country got 23.75% of the oil that was produced by the Turkish Petroleum Company, a company created in 1912 which monopolized oil exploration and production in Iraq. According to the Heritage Foundation, on average, the United States imports more petroleum than it exports. As of 2018, the United States imported around 10.2 million barrels of petroleum per day.


One of the most significant moments of the United States’ economic involvement in the Middle East was in 1933 when the monarch and founder of Saudi Arabia, Abdulaziz bin Abdul Rahman, issued concessions to the Standard Oil of California, an American oil company. In exchange for the technologies and intellectual insights of Americans, Saudi Arabia would distribute oil to the U.S, which was needed in order to stay in power and compete with the Soviet Union. Standard Oil of California reformed into the Arabian-American Oil Company (ARAMCO) which offered Saudi Arabia 50% of oil profits, and since both parties were appeased with this new deal a political and military alliance began. According to Bloomberg, in May and June of 2020, Saudi Arabia’s oil deliveries more than doubled compared to the oil deliveries of 2019. Surprisingly, on January 6th, 2021, for the first time in 35 years the U.S had not imported any oil from Saudi Arabia. The U.S Department of State still claims that they have a longstanding security relationship with Saudi Arabia.


The United States is now the world’s largest oil producer, and as long as civilians continue to fuel their cars with gasoline, the country will never be completely energy-independent.


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