OCR Specification focus:
‘British oil companies and relations with Faisal and Iraq shaped governance and economy.’
British involvement in Iraq from the 1920s centred on oil concessions and strategic influence, shaping governance, the economy, and the monarchy under King Faisal I throughout the interwar period.
British Interests and the Creation of Iraq
Following the collapse of the Ottoman Empire after the First World War, Britain sought to secure its imperial interests in the Middle East. Iraq, with its vast potential oil reserves and strategic location between the Persian Gulf and the Levant, became a crucial component of British foreign policy. Britain established the British Mandate for Mesopotamia in 1920 under the League of Nations, aiming to control the region indirectly through local governance while safeguarding economic and strategic objectives.
A key figure in this process was Faisal ibn Hussein, a Hashemite prince who had fought alongside the British during the Arab Revolt (1916–1918). Britain installed Faisal as King of Iraq in 1921, creating a monarchy intended to be friendly to British interests while appearing to offer Iraqi self-determination.
Mandate: A system established by the League of Nations after World War I in which former Ottoman and German territories were administered by European powers until deemed ready for independence.
This arrangement allowed Britain to maintain significant influence over Iraq’s political development while prioritising access to oil and strategic positioning.
The Strategic Importance of Oil
Oil was the primary motivation for Britain’s involvement in Iraq. By the early 20th century, petroleum had become indispensable to military and industrial power, especially for the Royal Navy, which had transitioned from coal to oil fuel under the leadership of Winston Churchill as First Lord of the Admiralty. Securing a reliable oil supply was therefore considered a matter of national security.
In 1912, British interests had already secured control over Persian oil through the Anglo-Persian Oil Company (APOC). In Iraq, British attention turned to the Turkish Petroleum Company (TPC), founded in 1912 with German, British, and Dutch interests. During and after the war, Britain manoeuvred to exclude German shareholders and ensure British dominance.
Concession: A legal agreement granting a foreign company rights to explore, extract, or sell natural resources in another country, often in exchange for royalties or revenue-sharing.
By 1925, Iraq granted TPC a concession to exploit its oil resources. This company was reorganised in 1929 as the Iraq Petroleum Company (IPC), dominated by British and French interests, along with a minority share held by the American Near East Development Corporation. Through IPC, Britain maintained a decisive role in Iraq’s oil industry.
IPC built the Kirkuk–Haifa and Kirkuk–Tripoli pipelines (1932–34) to move Kirkuk crude to the Mediterranean under British strategic oversight.
Schematic map of the Kirkuk–Haifa oil pipeline, the main IPC export route from northern Iraq to the Mediterranean in the 1930s–1940s. It illustrates the line running from Kirkuk across Transjordan to Haifa. The diagram focuses on route geography; station-level engineering detail is not included. Source
King Faisal I: Balancing Nationalism and British Influence
King Faisal I (r. 1921–1933) played a pivotal role in legitimising British influence while seeking to assert Iraq’s sovereignty. Faisal understood the necessity of British support for the stability and modernisation of the nascent Iraqi state but also recognised the growing resentment among Iraqis toward foreign control.
King Faisal I (1921–1933) balanced Hashemite legitimacy, British oversight, and oil concessions to stabilise the new Iraqi state.
Studio portrait of King Faisal I of Iraq in full dress, taken during his final visit to London (c. June 1933). The image supports discussion of Faisal’s statecraft amid mandate constraints and oil negotiations. Note: the setting (London studio) reflects the period’s diplomatic milieu rather than conditions inside Iraq. Source
Faisal’s government worked to build a national identity in a country composed of diverse Sunni, Shi‘a, and Kurdish communities, often relying on British advisers and financial support. However, Faisal frequently had to balance nationalist pressures with British demands, particularly over oil and military matters.
Britain retained control of RAF bases at Habbaniya and Shaibah, allowing it to project power across the region.
The 1930 Anglo-Iraqi Treaty guaranteed continued British military and political influence even after Iraq’s formal independence in 1932.
Faisal’s foreign policy remained closely aligned with Britain, though he increasingly pressed for fairer terms in oil agreements.
British Oil Companies and Economic Control
The Iraq Petroleum Company (IPC) became the central instrument of British economic control. Its concession terms heavily favoured foreign shareholders, offering Iraq limited royalties and minimal say in production and pricing. This imbalance generated resentment within Iraqi political circles and among the public.
Key features of IPC’s dominance included:
Monopoly control: IPC controlled exploration, extraction, and export, preventing Iraq from developing independent oil policies.
Minimal revenue: Early concessions granted Iraq royalties based on production rather than profits, resulting in limited economic benefit.
Foreign labour and technology: British engineers and managers dominated operations, restricting the development of an indigenous oil sector.
Haifa became the key IPC terminus and refinery hub, integrating Iraqi crude into British imperial supply chains.
View of the Iraq Petroleum Company terminus at Haifa Bay in the late 1930s. The image shows storage tanks and shoreline infrastructure at the pipeline’s Mediterranean end. It provides concrete context for British-controlled export facilities referenced in the notes. Source
Despite these inequalities, oil revenues did provide a foundation for Iraq’s early state-building. Funds were used for infrastructure, education, and military development, though dependence on foreign companies curtailed economic sovereignty.
Governance Under British Influence
British involvement extended beyond oil into the broader structure of governance. High Commissioners and advisers wielded significant power, shaping Iraq’s legal, administrative, and military systems. Britain prioritised stability and pro-British leadership, often intervening directly to quell uprisings or remove hostile officials.
Examples of British influence included:
1920 Revolt: Widespread Iraqi opposition to foreign rule was brutally suppressed, reinforcing Britain’s commitment to indirect governance through Faisal.
Military training: British officers helped establish and train the Iraqi army, ensuring loyalty to the monarchy and Britain.
Infrastructure projects: British companies led railway, telegraph, and irrigation projects, embedding economic and political influence.
This governance model tied Iraq’s development closely to British interests and constrained the emergence of independent policymaking.
Legacy of British Policy in Iraq
By the time of Faisal’s death in 1933, Iraq had achieved formal independence but remained economically and strategically dependent on Britain. The structure of oil concessions ensured that British companies continued to profit disproportionately, and the monarchy remained closely aligned with British policy.
The consequences of British involvement were significant:
Iraq became a client state, reliant on British military and political support.
Oil wealth, while transformative, remained under foreign control, limiting economic diversification.
Nationalist resentment over foreign exploitation laid the groundwork for later political upheaval, including the 1958 revolution that overthrew the monarchy.
Britain’s pursuit of oil and strategic advantage through mandates, concessions, and alliances fundamentally shaped Iraq’s governance and economy. The partnership with Faisal I provided a veneer of legitimacy but entrenched foreign influence deep into Iraq’s political and economic structures — a legacy that continued to shape the country well into the postcolonial era.
FAQ
The IPC was formed from the earlier Turkish Petroleum Company in 1929, with shares distributed among several Western powers. British companies held the largest share through the Anglo-Persian Oil Company and Royal Dutch Shell, while France’s CFP and the American Near East Development Corporation held smaller stakes.
This distribution was significant because it reflected Britain’s desire to prevent any single power from dominating Iraqi oil and ensured Western control excluded Germany and the Soviet Union. The structure also limited Iraq’s direct involvement, reinforcing foreign influence over the country’s most valuable resource.
The 1930 Anglo-Iraqi Treaty paved the way for Iraq’s nominal independence in 1932 but ensured Britain retained extensive influence.
Key provisions included:
The right to maintain air bases and move troops through Iraq in wartime.
Continued British advisory roles in government and military institutions.
Strategic cooperation over foreign policy and defence.
Although Iraq became a League of Nations member, this treaty meant Britain’s political and military presence remained embedded, shaping Iraq’s governance beyond the mandate period.
Oil revenues, though limited due to restrictive concession terms, were vital for Iraq’s state-building efforts. The government used income to:
Build infrastructure such as roads, railways, and public buildings.
Fund education and civil service expansion to strengthen state institutions.
Support the development of a small but modernised army under British guidance.
However, dependence on foreign companies restricted economic diversification, leaving Iraq vulnerable to fluctuations in oil output and foreign decision-making.
Nationalists criticised the concession agreements as exploitative, arguing that Britain and foreign companies profited far more than Iraq.
Their main grievances included:
Minimal royalties compared to the value of oil exported.
Exclusion of Iraqis from managerial and technical roles in IPC.
British prioritisation of imperial needs over Iraqi development.
Such criticisms grew louder as nationalist movements gained momentum, fuelling resentment that contributed to political instability and the eventual overthrow of the monarchy in 1958.
Faisal pursued several strategies to strengthen Iraqi autonomy while preserving British support.
He negotiated adjustments to oil concession terms and pressed for greater revenue.
He promoted education and bureaucracy to foster a capable Iraqi elite.
Faisal sought to unify Iraq’s diverse ethnic and sectarian groups under a shared national identity.
While these efforts achieved partial success, British control over oil, defence, and foreign policy constrained Iraq’s sovereignty, leaving Faisal dependent on imperial backing to maintain stability.
Practice Questions
Question 1 (2 marks):
Identify two ways in which British oil companies influenced Iraq’s economy during the interwar period.
Mark scheme:
Award 1 mark for each valid point, up to a maximum of 2 marks.
Possible answers include:
By controlling exploration, extraction, and export of oil through the Iraq Petroleum Company (IPC). (1)
By limiting Iraq’s revenue to royalties, restricting economic independence. (1)
By investing in infrastructure projects linked to oil production, such as pipelines. (1)
By shaping economic priorities around British strategic interests. (1)
Question 2 (6 marks):
Explain how relations between Britain and King Faisal I shaped the governance of Iraq in the period 1921–1933.
Mark scheme:
Level 1 (1–2 marks): Basic description of events or general statements with little explanation.
May mention that Britain installed Faisal as king or that Iraq was under British influence, but offers limited detail or analysis.
Level 2 (3–4 marks): Clear explanation with some detail of how relations influenced governance.
Explains that Britain supported Faisal’s monarchy to ensure a pro-British government.
Mentions British advisers shaping Iraq’s administration and military.
Describes how the 1930 Anglo-Iraqi Treaty maintained British influence after independence.
Level 3 (5–6 marks): Detailed and well-supported explanation showing clear understanding of how British–Faisal relations shaped governance.
Explains that Faisal balanced nationalist pressures with British expectations, legitimising British control while building state institutions.
Discusses Britain’s use of military bases, advisers, and treaties to embed influence in Iraq’s political system.
Notes the consequences of this relationship, including limited Iraqi sovereignty and dependence on British support.
