How oil became a vital cog in US foreign policy


Securing reliable supplies of oil has been a key strategic objective of US foreign policy strategy for most of the 20th century and those with oil to sell know it, writes Maurice Walsh

A US State Department official, writing in 1945, could confidently assert that for most of the 20th century "petroleum has played a larger part in the external relations of the United States than any other commodity".

A year later the man drawing up the American government's first coherent policy on foreign oil declared that a ready, available supply was necessary to greatness in the rest of the 20th century.

In 1977 Henry Kissinger, in a speech in Detroit, said America's need for oil was intolerable: all of US foreign policy was in danger of being held hostage by this dependence.

This candour is at odds with the reluctance among members of the Bush administration to acknowledge that securing reliable supplies of oil for the United States and its allies occupies a significant place in foreign policy calculations.

When oil is mentioned it's dealt with obliquely.

In August of last year, Vice President Dick Cheney said Saddam Hussein's aim was to dominate the Middle East and thereby take control of a significant proportion of the world's energy supplies.

So how does this match Donald Rumsfeld's impatient assertion that the war in Iraq had "literally" nothing to do with oil?

Part of the problem is that much of the debate about oil in the run-up to the war in Iraq focused on greed and conspiracies. President Bush and his friends in the oil business were accused of using a war over weapons of mass destruction as a pretext for grabbing control of Iraq's oil for themselves.

In reply, people like David Frum - Bush's ex-speechwriter who coined the phrase "axis of evil" - proclaimed that US policy since September 11th showed that concern for oil had now been relegated to a minor role in American thinking about the Middle East.

What was often missing was any consideration of the strategic value of oil to the US and its allies in the industrialised world, a value that has been increased hugely by the new direction the US has taken since September 11th. One way of considering this is to look away from the Middle East altogether.

The oil under the Caspian Sea is a good illustration of how the world that existed before the Russian Revolution has joined seamlessly with the post-Soviet world as if history was taking up from where it left off.

Before 1920 the oil boom in Azerbaijan brought investors from Europe to the capital, Baku.

They lived in the plush mansions built from the fortunes that oil brought; the streets of the old town are still touched with this grandeur. When Azerbaijan was absorbed into the Soviet Union, the oil was largely undeveloped.

After Azerbaijan became independent in 1991 the oil companies descended on Baku again.

From the top floor of one of the Soviet-era hotels overlooking the seafront in Baku you can see some of the ancient rusty oil derricks out to sea.

Further behind the promenade that runs along the shore are the new hotels where engineers and geologists sip cocktails, and the Irish, Scottish and English theme pubs where the rigging workers drink.

During the 1990s, President Clinton decided that Caspian oil would be a perfect alternative to relying so much on the Middle East. But he didn't want any more oil to run through the Russian pipelines already there.

And he especially wanted to keep Iran isolated.

A pipeline through Iran would make geographic and commercial sense and the Iranians had designs on exercising their influence as the major regional power.

The Americans wanted Turkey to be the regional power instead and so their preferred route for a new pipeline was from Baku west to Georgia and then into Turkey, ending up at the Mediterranean port of Ceyhan. To achieve this, Clinton had to work hard on the governments in the region and on the oil companies which doubted the pipeline's commercial viability.

Since the early 1990s Azerbaijan has been ruled by President Haidar Aliyev, a Brezhnev-style member of the last Soviet politbureau who had transformed himself into the champion of Azeri independence; he's won his presidency in elections but no foreign observers have ever said they were free and fair.

Aliyev was smart enough to know that Azerbaijan's interest lay in going along with the Americans. Eventually the oil companies, led by BP, went along with the pipeline too.

Work has finally begun on laying the pipes, a project which will cost £3 billion (€4.3 billion).

It's a story of relentless American diplomatic efforts in pursuit of ostensibly commercial ends.

However, getting access to Azeri oil wasn't just about economics.

The American presence in Baku, eased by the quest for oil, is transforming local geopolitics.

For Azerbaijan, moving close to the United States is a way of getting away from the Russians. And September 11th brought home to the Americans how useful it was to have new allies in the Caspian.

When the war began in Afghanistan, American warplanes were given the right to fly over Azerbaijan. And last June when the US announced the dispersal of troops from bases in Germany, it said some would go to Azerbaijan.

Gen Charles Wald, the deputy commander of the US European Command, was explicit about their mission: the aim he said was to protect the long-term viability of oil and gas reserves in the Caspian.

The Americans are performing in the Caspian the kind of job that would once have been done by the British - though in a mobile, unbuttoned, non-imperial style suited to the distaste of the world's sole superpower for the old European powers that dominated the world before it.

The most potent symbol of the transfer of power from London to Washington at the end of the second World War was the tussle over control of the oil in the Middle East.

In 1944 President Roosevelt summoned the British ambassador to the White House to explain his idea of a post-war settlement on a rough map of the Persian Gulf he'd sketched out himself.

The British could have Iran, the oil of Iraq and Kuwait would be shared, but Saudi Arabia, Roosevelt declared, "is ours".

Of course much has changed since then.

The dominance of the international oil companies was ended by the nationalisation of the 1970s; oil producers took control of their resources. But securing oil supplies is still a key strategic objective of the United States and those with oil to sell know it.

  • Maurice Walsh is a BBC journalist. His report on oil in American foreign policy begins this evening on BBC Radio 4 (8p.m.).

A second programme goes out on August 12th.