'File 14/15 Middle East Oil' [‎4r] (7/38)

P.I.C. No* 80.
V
S E C R L T
MIDDLE K\S r ±' OIL.
Precis,
world.
1 -'l?hc Middle Easi is rapidly "becoming ohe princip: 1 oil-exporting area of the
2. Existing known Middle’East oilfields • ro • "jii-ted to c .ifcrdrt the V-trJ.
world reserves of.cruel* oil ’'nd t'urther discoveries m ouc areu are ^--ill probaolo*
3 * American production is now so high th i ii maintained at the curreno rate
American reserves would be exhausted within-12-15 years unless further supplies are
discovered in ohe meantime.
4* Already American strategists arc claiming that /meric wo. Id not have
sufficient petroleum for another major war.
’ 3 . It is probable that within a few years America, ^?.ch h-s hi*c’ner-co oeen the
world’s principal oil-exporting area, may cease to export and m?y even become an^im
porter, Its place as the world* s rain oil-exporting area v.dll be taken by the idddle
6 R-alis? c-ion of -his fact h«a led American oil co pa.nies io intensify their
efforts to obtain a foottold in the Middle East, and during the past few years many new
concessions have been taken up, particularly in Saudi Arabia and mho Persian Gut.
X oortant new discoveries have been made and Jiisencan. production in this area is in
creasing at a very rapid rate. The Anglo-American Oil Agreement of 1945_laid down the^
principle of ’’equal opportunity of exploration and developmenx; in cue hue die Easo area .
The door is thus held open to further America penetration. ^ .
6 . British interests, however, arc- still e^ ^/xlnanc* Tc- is csiunated cha.t
British capital controls 70-75^ of present production and 60}o of Lhe toaal known oil
reserves of the area. The Production of ’’sterling” oil is of enormous economic im
portance in view of Britain’s lacm of foreign currency. ^ i
8 . Russia, formerly an oil-exporting motion, is reporuea to be imaing dixfic .l v
in meeting her rapidly expanding needs of oil. The .Russians are now bringing gre.^
pressure -bo bear on Persia to obtain exclusive oil rignts in ^ordiern Persia. T- v
always opposed attempts by other nations to obtain oil concessions tbere.
y %. Crude oil is a wasting-asset. At ohc presen •• rate of conuur^xon ousting
known -world reserves are estimated to be sufficient x‘or only a. 0 -c 5 years. though i
is UkSyt^t in the meantime new oilfields will be discovered, synthetic Proauction
will be increased and alternative sources;of. power may be developed, io is nevor.hel s
obvious that Middle East oil will ac juire inerd roing importance both m v/ar and an
peace as \vorld stocks diminish. .... tv> ^ nf
10. To the British Empire, Middle East oil is ox vita.t importance. Des.rucoi n
^the oil installations in this area or, torso still, choir capture by the enemy, would
*r.ake it impossible for us to hold the Middle East against invasion m i orce by a land
11, The oil-P'roducing countries of the Middle Bas:- rze:-
(a) Persia^.
Tlic Anglo-Iranian Oil Company (British capital) h- s a concession of ^
100,000 square miles'covering southwest Persia. oilfields aro now producing in
this area, all connected by pipeline to the A.I.O.C. re .j'^ry ^ a r,aan. ,r '
is rapidly increasing end is expected shortly to reach 20,OCX),000 tons per ann ^
are no other oil concessions at present operative in Persia but the Russians arc press
ing hard to obtain a concession in the north, and British ond .mieixcan oil ca-pani^s
want concessions in the southeast. During the war, however, the.Persian .royeiuM.nu
passed a law that no concessions would be granted until all icreign troops had lof o
The A.I.O.C. concession also covers a small oilfield on both sides of the .
Iraq-Persian frontier at Kerman shah and K.-naoin. The oil is re:, ined in local renneries
and sold in Iraq and Persia for local consump. ion.
(b)
—» ' +j . ^ . ■ .
The whole of Iraq, with the exception of the ,r all Kanaqm area, nas
/been divided