Lakhasly

Securing Strategic Access to Oil in the Gulf RegionThe primary interest of the United States in the Middle East region is to assure American access to oil. Oil, however, was not considered significant until the end of the nineteenth century. The First Industrial Revolution that began in the last decades of the eighteenth century was fueled by water power and then by coal. The Second Industrial Revolution was driven by the surge of readily available and comparatively cheap oil that became a growing necessity in the world’s rapidly expanding petroleum-based economies. This spurred an insatiable thirst for fresh supplies of crude and new markets in which to expand. In the late nineteenth century and early twentieth century, the petroleum industry and the consumption of oil-based products developed rapidly across the world and especially in Europe and North America. At the time, the main sources of oil were Russia, the United States, Mexico, and Romania (Gelvin, 2005) .In this context, it should be noted that in the early twentieth century, the petroleum industries flourished all over the world, but most especially in Europe and North America. During World War I, major world powers began to prioritize oil as a vital military asset; modern warfare caused a constant need for oil and its subsidiary petroleum-based products which were a necessity for ships, airplanes, tanks, submarines, and the lubrication of modern rifles. This heavy use of oil during World War I created a severe shortage in 1917-1918 (Paul, 2002) .Following World War I, several Western companies gained mutual concession in the Middle East, especially in Iran, Bahrain, Kuwait, and Saudi Arabia. The idea behind these mutual concessions was to negotiate solutions to incompatible political and business agendas and to make entrepreneurial explorations safer. At the close of the Second World War, the United States government became wary about cutbacks in oil production and the possible economic hiccups that would stem from a fuel shortage. To prevent a fuel shortage, the United States made economic demands for concessions with multiple Middle Eastern countries. This requirement started in the pre-war years with concessions in Bahrain (1929), Kuwait (1934), and Saudi Arabia (1947). These concessions were shared by multiple oil companies (Rustow, 1982) .In 1948, following American demands, several companies were developed to exploit these concessions. The Arabian American Oil Company (ARAMCO) was created by Esso (now Exxon), Texaco, Standard Oil of California (SoCal), and Mobil all came into existence to develop the Saudi concessions. These companies soon surveyed and developed large production fields that allowed them to harvest massive profits from low-cost oil that would be used to rebuild the economies of Europe and Japan that had been destroyed during World War II. The boom eventually brought this cheap oil to United States shores and stimulated the growth of the post-war American economy, which reiterated the desire for more United States companies to seek concessions in Kuwait, Iran, and other oil producers in the region (Diller, 1991) .Meanwhile, as the development of the Middle Eastern concessions increased, the United States oil production began to decrease in ratio to its increased consumption. This grew to as much as 30% of the world’s total consumption of crude oil with only an estimated 6% of the world’s reserves (Iskandar, 1974) .Following World War II, the United States began looking for alternative sources of oil abroad to meet its own future demands. The Middle East was very attractive to both the United States government and American petroleum companies due to its proven long-term oil reserves. Arab oil reserves were shown to potentially have much more than the originally estimated 60% of the world oil reserves. In fact, Saudi Arabia, Iraq, Kuwait, and Abu Dhabi possessed more than 50% of the known reserves amongst themselves alone (Iskandar, 1974) . To attest to this high-quality Middle Eastern oil was known to flow freely of its own pressure. This circumstance allowed for much cheaper production costs; the Middle East per production barrel ranged between $0.10 and $0.22 cents in comparison to $0.39 cents in Venezuela, and as much as $1.51 per barrel in the United States. This is a considerable difference when it comes to the bottom line (Rustow, 1982) .James L. Gelvin, in his book, The Modern Middle East: A History, indicates that among the most notable objectives of the United States in the Middle East region is to assure Western access to oil. The reasons for this are twofold: first, economic reasons are primary, and second, the strategic policy is dictated by the fact that the United States must supplement its domestic output of oil from the Middle Eastern resources. This is demonstrated by the fact that in 1973 as much as a third of the United States’ oil imports came from the Middle East just prior to the Oil Embargo Crisis. Even today the amount of oil remains at one-fifth of American imports. From a strategic perspective, the post-war economic recoveries of Europe and Japan were fueled by cheap Middle Eastern oil. Ever since the Oil Embargo Crisis, American policy has viewed oil as a strategic resource, as does much of the world. In fact, more than 40 years later, even Europe gets more than a third of its oil from the Middle East, and Japan gets nearly 80% of its oil from Middle Eastern trade partners (Gelvin, 2005) .Throughout the 1973 Arab-Israeli War, Arab members of the Organization of the Petroleum Exporting Countries (OPEC) led an embargo against the United States in response to the decision to re-supply the Israeli military. The embargo also applied to other countries that braced Israel including South Africa, the Netherlands, and Portugal. Petroleum exports were barred, and manufacturing reductions were made, straining the United States’ economy that was extremely reliant on foreign oil.