The Oil Kings | Andrew Scott Cooper

Summary of: The Oil Kings: How the U.S., Iran, and Saudi Arabia Changed the Balance of Power in the Middle East
By: Andrew Scott Cooper

Introduction

Delve into the fascinating world of oil politics and strategic alliances in ‘The Oil Kings,’ where the author, Andrew Scott Cooper, intelligently dissects the complex dynamics between the U.S., Iran, and Saudi Arabia during the 1960s and 1970s. Learn how former U.S. President Richard Nixon and his national security adviser, Henry Kissinger, crafted the ‘Nixon Doctrine,’ aimed at harnessing regional surrogate nations to protect American interests in the Persian Gulf. This enthralling text sheds light on the role of the Shah of Iran, Mohammad Reza Shah Pahlavi, and his relationships with various U.S. administrations, which impacted Iran’s domestic politics and shaped its future. Explore how the U.S. cultivated Saudi Arabia as an ally, the impact of the 1973 Arab-Israeli war on oil prices, and the crucial implications of the entwined petro-military-political agreements that had lasting consequences on global politics.

The Nixon Doctrine and the Shah of Iran

In ‘The Last Shah,’ historian Ray Takeyh discusses the emergence of the “Nixon Doctrine” and how it relied on regional surrogates to protect America’s interests in the Middle East. To safeguard the flow of oil through the Persian Gulf, the US turned to its old ally, Mohammad Reza Shah Pahlavi, who became Iran’s leader. Although stained by the coup that overthrew his pro-Soviet predecessor, the Shah remained independent in some areas, particularly oil production.

Nixon’s Decision to Raise Oil Prices

In a secret meeting with the Shah’s emissary on May 14, 1970, President Nixon gave permission to Iran to raise oil prices. This was part of the President’s strategy to repay the Shah, maintain him as an ally, and help him buy more US arms. However, Iran’s spending soon exceeded its oil revenues, and US officials grew concerned that the Shah’s military overspending was taking funds away from crucial civilian programs. Despite these concerns, Nixon continued to support the Shah, leading to his downfall during the Iranian Revolution of 1979. While oil was the Shah’s greatest source of strength, it was also his Achilles’ heel, and the decision to raise oil prices ultimately had far-reaching consequences for Iran and the entire region.

The Rise of Petro-Political Power

This passage from “The Prize” by Daniel Yergin explores the development of petro-political power in the United States and Saudi Arabia during the 1970s. While Saudi Arabia’s King Faisal favored gradual increases in oil prices to avoid disrupting global economies, the Nixon administration lacked a cohesive energy policy due to its emphasis on re-election. As a result, federal agencies worked independently on fuel issues with no direction from the cabinet. John Connally, an important fundraiser for Nixon’s campaign, negotiated with the Saudis about their push for control of Aramco, leading to the Saudis gaining a 25% participation deal and eventual 51% controlling interest in the company. Meanwhile, Iran’s Shah issued an ultimatum to relinquish control of the National Iranian Oil Company, setting the tone for a shift in global oil power. This culminated in the Arab oil embargo against the US in 1973, the first time nations used oil as an economic weapon. To break the embargo, Kissinger and Nixon approached the Saudis about a bilateral relationship in which the US would provide economic assistance in exchange for increased oil production and refusal to grant OPEC partners a price increase. The US and Saudi Arabia solidified this alliance at a party for 1,400 guests in 1974.

Iran’s High-Stakes Diplomacy

In the aftermath of the Watergate scandal, the Shah of Iran lost a critical ally in President Nixon. Nevertheless, he remained determined to assert Iranian influence and usher in a new regional political bloc. A key aspect of this geopolitical strategy was to obtain nuclear power plants and fuel while promoting Iran as a responsible nuclear energy user. Complicated by economic turmoil and the Shah’s flamboyant military expenditures, Iran’s nuclear ambitions raised concerns within the US government. But Iran’s dwindling economy meant there was a money chase to be won, placing Iran in a position of power. Kissinger, who was hired as a diplomatic agent, sought to find a solution that would bring Iranian petrodollars back into the American economy. This led to a plan for Iran to purchase $12.5 billion in US nuclear reactors, while selling oil to the US below the OPEC price. Despite opposition, the deal was a significant achievement in Iranian diplomacy.

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