OCR Specification focus:
‘Oil shaped strategy: Seven Sisters, concessions, nationalisation, the 1953 Mossadeq coup, OPEC and oil as a weapon.’
Oil transformed Middle Eastern geopolitics from the early twentieth century, shaping Great Power strategies, driving nationalisation, provoking coups, and underpinning new alliances and rivalries across the region.
Oil and Strategy in the Middle East
Oil became a decisive factor in the Middle East’s modern history, intertwining with imperial ambitions, nationalist movements, and Cold War rivalries. The struggle over its control involved state actors, multinational corporations, and revolutionary movements, profoundly influencing regional politics and international relations.
The ‘Seven Sisters’ and Early Oil Dominance
By the early 20th century, European powers recognised the strategic value of Middle Eastern oil for industrialisation, transportation, and military power. Control over oil resources became a central goal of imperial policy.
Seven Sisters: A term coined by Enrico Mattei in the 1950s to describe the seven major Western oil companies that dominated global oil production and distribution.
The Seven Sisters included:
Anglo-Iranian Oil Company (AIOC) (later British Petroleum)
Royal Dutch Shell
Standard Oil of New Jersey (Exxon)
Standard Oil of New York (Mobil)
Standard Oil of California (Chevron)
Texaco
Gulf Oil
These companies negotiated concessions with Middle Eastern governments, granting them extensive rights to explore, extract, and sell oil, often for minimal returns to host countries. For example:
In 1901, Britain secured a concession in Persia, establishing AIOC as a dominant force.
The 1928 Red Line Agreement divided former Ottoman oil concessions among Western powers.
Concessions in Iraq and Saudi Arabia entrenched Western corporate and governmental influence.
The Seven Sisters’ power extended beyond economics. They were instruments of Great Power strategy, ensuring secure oil supplies and sustaining imperial influence. Host states, however, increasingly resented the unequal distribution of profits and control.
Nationalism, Oil, and the Mossadeq Crisis of 1953
By the mid-twentieth century, anti-imperialist sentiment and economic nationalism challenged Western dominance. Iran became the focal point of this struggle.
Nationalisation: The transfer of private assets into state ownership, often to reclaim control of natural resources from foreign powers.
Under Mohammad Mossadeq, elected prime minister in 1951, Iran sought to reclaim sovereignty over its oil resources. Mossadeq nationalised the Anglo-Iranian Oil Company, arguing that Iranian wealth should benefit Iranians, not foreign shareholders. Britain, whose economy and navy depended on Iranian oil, saw this as a grave threat.
Mohammad Mossadeq and Vice-Minister Pirnia meet World Bank representatives in Tehran (4 January 1952). The image captures the diplomatic efforts surrounding oil nationalisation before the 1953 coup, illustrating the political–economic contest over control of Iran’s oil revenues. Source
Key events:
Britain imposed an oil embargo and lobbied for international isolation of Iran.
The crisis escalated during the Cold War, with the US fearing that instability might lead Iran towards Soviet influence.
In August 1953, the CIA and MI6 orchestrated Operation Ajax, a coup that removed Mossadeq and restored Shah Mohammad Reza Pahlavi’s authoritarian rule.
The coup reasserted Western control over Iranian oil and sent a clear message: attempts to challenge Western oil dominance could provoke direct intervention. However, it also fuelled enduring resentment and anti-Western sentiment in Iran and beyond.
The Rise of OPEC and Changing Oil Dynamics
By the late 1950s, oil-producing states sought to rebalance power away from Western companies. Growing nationalist assertiveness, coupled with resentment over low royalties, led to collective action.
OPEC (Organisation of the Petroleum Exporting Countries): An intergovernmental organisation formed in 1960 to coordinate oil policies and secure fair prices and revenues for member states.
Founded in Baghdad in 1960 by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, OPEC challenged the Seven Sisters’ monopoly. Its aims were to:
Coordinate production and pricing policies
Increase state revenues
Assert sovereignty over natural resources
Map showing current OPEC members and former members. It locates the founding Middle Eastern producers alongside other member states, illustrating the organisation’s global spread. The map includes former members, which is additional context beyond the core syllabus. Source
OPEC’s emergence marked a fundamental shift. By uniting producers, it reduced Western leverage and gave member states greater control over their economic destinies. Over time, OPEC expanded to include other Middle Eastern states such as Qatar, Libya, and the UAE.
Oil as a Weapon: Strategy and Geopolitics
As producer power grew, oil evolved into a potent geopolitical weapon. Control over supply could now be used to influence global politics and foreign policy.
Key examples include:
1973 Oil Embargo: In response to Western support for Israel during the Yom Kippur War, Arab OPEC members cut production and imposed an embargo on the US and its allies. Oil prices quadrupled, demonstrating the vulnerability of industrialised economies and the strategic power of oil producers.
1979 Iranian Revolution: The overthrow of the Shah disrupted production, triggering another oil shock and highlighting how political upheavals in producer states could reverberate globally.
Gulf Wars (1980–2003): Western interventions, particularly by the US, were shaped by concerns over oil supply and security. Iraq’s invasion of Kuwait in 1990 and the subsequent Gulf War underscored oil’s strategic centrality.
Oil was no longer merely an economic resource but a tool of diplomacy, coercion, and conflict. Producer states leveraged it to advance political objectives, while consumer states sought to secure access through alliances, military bases, and intervention.
Client States, Bases, and Strategic Control
Oil also shaped broader strategies of influence. Great Powers established client states, secured military bases, and engaged in direct occupations to protect oil supplies and transport routes:
The US cultivated close ties with Saudi Arabia, exchanging security guarantees for stable oil flows.
British and American forces maintained bases in the Persian Gulf and elsewhere to secure shipping lanes and respond rapidly to crises.
Oil wealth enabled regimes to consolidate power domestically, fund militaries, and pursue regional ambitions, as seen in Saddam Hussein’s Iraq and Saudi Arabia’s expansive foreign policy.
These dynamics intertwined with the Cold War, as both superpowers competed for influence in oil-rich states. Control over oil routes and production sites became a central element of their global strategies.
Legacy and Continuing Relevance
The transformation of oil from a commercial commodity to a strategic instrument reshaped Middle Eastern politics and global power relations. From the Seven Sisters’ dominance and Mossadeq’s overthrow to the rise of OPEC and the weaponisation of oil, control over hydrocarbons lay at the heart of twentieth-century geopolitics. Oil wealth underpinned state-building, financed militaries, and fuelled ideological conflicts, while dependence on Middle Eastern oil made the region a perpetual focus of Great Power intervention and rivalry.
FAQ
The Seven Sisters secured long-term concessions with favourable terms, often lasting decades, that gave them exclusive exploration and extraction rights.
They used their financial power and global networks to control refining, transportation, and distribution, limiting producers’ ability to sell oil independently.
Governments dependent on oil revenues had limited bargaining power, and Western powers frequently supported the companies diplomatically and militarily.
Attempts to renegotiate or nationalise resources, like in Iran, were often met with economic sanctions, political pressure, or covert intervention, preserving corporate dominance until the rise of OPEC.
Operation Ajax was the 1953 Anglo-American coup that overthrew Iranian Prime Minister Mohammad Mossadeq after he nationalised the Anglo-Iranian Oil Company.
The CIA (under Kermit Roosevelt Jr.) and MI6 collaborated to destabilise Mossadeq’s government.
They funded protests, bribed politicians, and spread propaganda portraying Mossadeq as a communist threat.
Military officers loyal to the Shah staged a coup, arresting Mossadeq and restoring royal authority.
The operation set a precedent for Cold War covert interventions to protect Western economic and strategic interests, particularly in oil-rich regions.
Initially, OPEC’s influence was limited, as Western oil companies still controlled much infrastructure and pricing. However, member states gradually increased control through renegotiated contracts and nationalisation.
In the 1970s, OPEC successfully used production cuts and price coordination to shift market power. Oil prices rose sharply, and revenue surged for producer states.
This economic leverage allowed Middle Eastern governments to expand development programmes and pursue more independent foreign policies, reducing Western dominance in the oil sector.
Oil was central to superpower strategy. The United States cultivated alliances with major producers like Saudi Arabia and Iran to secure supply and contain Soviet influence.
US support for the Shah ensured access to Iranian oil and a strong anti-communist ally.
Britain and the US built bases in the Gulf to protect shipping routes and installations.
The Soviet Union, meanwhile, forged ties with Iraq, Syria, and later Libya, often assisting in nationalisation and infrastructure projects.
Thus, oil interests shaped both blocs’ diplomatic, military, and economic policies in the region.
The 1973 embargo by Arab OPEC members targeted countries supporting Israel during the Yom Kippur War, notably the US and the Netherlands.
Oil production cuts reduced global supply, causing prices to quadruple.
Western economies faced inflation, recession, and fuel shortages, highlighting their vulnerability.
Governments introduced energy-saving measures and sought alternative energy sources.
The crisis demonstrated that producer states could use oil as a powerful geopolitical weapon and marked a shift in global economic power towards the Middle East.
Practice Questions
Question 1 (2 marks)
What was the main reason for the formation of OPEC in 1960?
Mark scheme:
1 mark for identifying the key reason: to allow oil-producing countries to coordinate policies and assert greater control over their oil resources.
1 additional mark for explaining the context, such as challenging the dominance of Western oil companies (the “Seven Sisters”) or increasing state revenues.
Question 2 (6 marks)
Explain how the 1953 Mossadeq coup affected Great Power influence over oil in the Middle East.
Mark scheme:
1 mark for identifying that Mossadeq nationalised the Anglo-Iranian Oil Company to reclaim Iranian control.
1 mark for mentioning Britain’s response, including an embargo and diplomatic pressure.
1 mark for describing the CIA and MI6 involvement in Operation Ajax, which overthrew Mossadeq.
1 mark for stating that the Shah was restored to power, increasing Western influence.
1 mark for explaining that the coup reasserted Western control over Iranian oil and discouraged similar nationalisation attempts.
1 mark for linking the coup to broader Cold War strategy and the protection of Western oil interests in the region.
