Oil was the major factor of Western influence in the Middle East. No longer, as we move away from oil. Asian actors fill the void.
Full length:
Oil still is what makes the entire world go round. Access to it has been the most important policy requirement of Western countries for the last ninety years.
Around the turn of the last century, oil was found in the southern US and mainly used in oil lamps. The Rockefeller company ‘Standard Oil’ became the dominant player by mixing many oil qualities from many wells to a ‘standard’ that oil lamps could burn safely. By the time Ford launched the T-model, oil consumption rocketed making that company one of the biggest in US. That led to international activities for both import of crude oil and export of refined one basically all around the world, creating what may have been the first multi-national.
The US Supreme Court ruled it as an illegal monopolist and ordered its break up in the States by 1911. It formally divided into 34 regional US companies, making even more money.
Europe started to develop a thirst for oil as well, Shell emerging as one of the big players from beginning in the then Dutch colony of Indonesia.
Major oil finds in the Middle East added momentum to both production and demand. The British navy replaced coal fired war ships to oil giving it a strategic advantage over the German navy during WW1 and others followed.
In 1928, leaders of Shell, Standard Oil and the Anglo Persian Oil Company met in a Scottish mansion to agree to what may have been the first world wide cartel. They agreed not to compete and also control transportation and refinery, the complete value chain. Four other oil majors joined the cartel soon after.
Politics listened and helped to fortify access to Middle East oil. The 1916 Sykes-Picot agreement carved up the Middle East into French, British (and some others) spheres of influence to be implemented once the Ottoman Empire was eliminated at the end of WW1. Local leaders were scarcely considered and borders such as the one between Syria and Iraq were defined without respect to local tribal situations, yet with respect to where oil had been found and was still expected to be found. The Anglo Persian Oil Company (today called BP) was not Persian at all. It had contracts to export Iranian oil leaving just some bling-bling money to the local rulers.
With the end of colonialism after WW2, the formal control of the areas dimished. Local (mainly military) strong men established dictatorships and continued to receive pocket money for the oil that was pumped up in their lands. With time there were several attempts at nationalising the oil with varying (increasing over the decades to follow) success.
But the grip on the resources was successfully maintained by the West.
By the 1960, the picture became more complicated. Western democratic values did not allow the easy military interventions that had preserved access before, diplomacy and heavy bribing was needed. The Cold War with USSR complicated the issues as the Soviet Union also made its influence known (Egypt’s flirt with them and building the Assuan dam is an example, Afghanistan a more recent one). The existence of Israel also did not make things easier.
Also, in 1960, OPEC was founded. This Organisation of Petroleum Exporting Countries tried to balance the West’s pricing power at a time that the oil majors decided to lower the oil price.
When OPEC started the oil crisis of 1973, they represented 70% oil worldwide oil production and indeed caused headaches. Europe developed the North Sea oil fields with advanced off-shore technology, reducing dependence on OPEC. Russian and Dutch gas fields gained in importance as domestic heating changed from oil to gas in many parts of Europe. Nuclear electricity was expanding rapidly (still 70% of all in France).
In 1979, Iran had its revolution, eliminating Western influence massively in one of the top oil producers. On the positive, early support for the rulers in Saudi Arabia largely maintained the Western (US in particular) influence there to a point that the rulers were personal friends of the Bush family and were counted as friends of the US.
With the two Gulf wars (the first one after annexation of Kuwait by Saddam) over, the West has returned home unsuccessfully and with very little appetite for further military adventures. When Libya (oil rich) imploded during the Arab Spring, no Western boots came on the ground. The involvement was purely by planes. In Syria (almost no oil), essentially nothing was done by the West except sending some money and arms to sinister groups opposed to Assad.
This is the fast forward to today:
Major expansion of renewable energy production further reduces thirst for Middle East oil. See my related blog post here.
US fracking and shale oil technologies have made the US essentially energy independent
Disastrous military interventions left both the population and Western governments with a serious hang-over.
Current low oil prices do not help boosting renewables. However, they have passed the tipping point (what's this?) where investment in renewables is cheaper per Watt installed electric power generation than investment in fossils for that purpose. See what's behind cheap oil.
Climate change fears expedite an energy transition highlighted by the Paris Convention in late 2015. Bad news for oil that sees declining production also due to depleting reserves and insufficient new finds.
Post-fact populist tendencies in the West erode our consensus and shift politicians’ focus towards their populations’ worries about hyped-up side issues that will weaken the West and accelerate our loss of influence while also setting the stage for a protectionism induced decline in trade, thus an economic recession.
This retreat of the West has created a power void that is now being filled by increasing Saudi activity (Yemen), the rise of terror groups in ungoverned areas (IS in Iraq/Syria) and massive involvement of Russia, Turkey and Iran.
Turkey needs to avoid a Kurdish nation state from establishing itself. Iran and Saudi Arabia are both trying to be the regional power. They are old foes and proponents of different, often hostile, flavours of Islam.
All have an issue with terrorism and chose to support dubious groups for murky reasons.
Russia wants a place back on the world stage, show its military is strong and maintain its naval base in Syria.
All, including the West, are eager to sell arms to no matter who.
Now wait for China to enter the stage!
Sorry, long read. If you made it this far, congrats!!