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Islam and Politics ( 1 Aug 2014, NewAgeIslam.Com)

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Israel's Creation, Communist Revolution and the Arab Oil




By Nauman Sadiq, New Age Islam

2 August 2014

Is it not the international politics most significant coincidence that the Balfour declaration for the creation of Israel was passed in the same fateful year: November 1917, in which the February and October Communist revolutions were taking place in Russia? Coincidences do happen but sometimes they are contrived to look like mere coincidences.

 No informed person can deny the importance of oil for the industrial economies, but it is generally believed in the foreign policy circles that oil took the centre stage in the international politics only after the collective Arab oil embargo of 1973 when the price of oil quadrupled in a short span. It is a fact that the US got so paranoid after the Embargo that it started keeping 60 days stock of reserved fuel, just in case the Arabs do it again.

 But the importance of oil after the 73 Embargo is a mistaken assumption. Direct and indirect control over oil resources played a crucial role in international politics since the early 20th century. The great powers of yore first realized the importance of oil during the First World War when Germany’s military capabilities were severely handicapped due to the shortage of fuel for its aircrafts, ships and mechanized ground forces.

 Here is a list of few sources (Wikipedia entries) to bring home the point that the critical importance of the Middle Eastern oil predates the 1917 Balfour declaration:

The Balfour Declaration (dated 2 November 1917) was a letter from the United Kingdom's Foreign Secretary Arthur James Balfour to Baron Rothschild, a leader of the British Jewish community, for transmission to the Zionist Federation of Great Britain and Ireland:

“His Majesty's government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country.”

Anglo-Persian Oil Company founded in 1908:

Volume production of Persian oil products eventually started in 1913 from a refinery built at Abadan, for its first 50 years the largest oil refinery in the world (see Abadan Refinery). In 1913, shortly before World War I, APOC managers negotiated with a new customer, Winston Churchill, who was then First Lord of the Admiralty. Churchill, as a part of a three-year expansion program, sought to modernize Britain's navy by abandoning the use of coal. Furthermore, Churchill wanted to free Britain from its reliance on the Standard Oil and Royal Dutch-Shell oil companies. In exchange for secure oil supplies for its ships, the British government injected new capital into the company and, in doing so, acquired a controlling interest in APOC. The contract that was set up between the British Government and APOC was to hold for 20 years. The British government also became a de facto hidden power behind the oil company.

Standard Oil of United States established in 1870:

Standard Oil Company and Socony-Vacuum Oil Company became partners in providing markets for the oil reserves in the Middle East. In 1906, SOCONY (later Mobil) opened its first fuel terminals in Alexandria. It explored in Palestine before the World War broke out, but ran into conflict with the British government.

Burmah Oil established in 1886:

It played a major role in the oil industry in South Asia for about a century through its subsidiaries, and in the discovery of oil in the Middle East through its significant influence over British Petroleum.

Iraq Petroleum Company:

The forerunner of the Iraq Petroleum Company (IPC) was the Turkish Petroleum Company (TPC), which grew out of the growing belief, in the late 19th century, that Mesopotamia (now Iraq) contained substantial reservoirs of oil.

In 1912, this company became the Turkish Petroleum Company (TPC), formed with the purpose of acquiring concessions from the Ottoman Empire to explore for oil in Mesopotamia.

A rising demand for petroleum during the war had demonstrated to the big powers the importance of having their own sources of oil. Since one of the original partners of TPC had been German oil interests (Deutsche Bank), the French demanded the German share in TPC as the spoils of war. This was agreed at the San Remo Oil Agreement; much to the annoyance of the Americans who felt excluded from Middle Eastern oil and demanded an "open door". After prolonged and sometimes sharp diplomatic exchanges, US oil companies were permitted to buy into the TPC, but it would take several years until the negotiations were completed.

TPC obtained a concession to explore for oil in 1925, in return for a promise that the Iraqi government would receive a royalty for every ton of oil extracted, but linked to the oil companies' profits and not payable for the first 20 years.

The discovery of oil in 1927 hastened the negotiations over the composition of Turkish Petroleum Company, and on 31 July 1928 the shareholders signed a formal partnership agreement to include the Near East Development Corporation (NEDC), an American consortium of five large US oil companies that included Standard Oil of New Jersey (later Exxon), Standard Oil Company of New York (later Mobil, which eventually amalgamated to ExxonMobil), Gulf Oil (which later merged with Chevron), the Pan-American Petroleum and Transport Company, and Atlantic Richfield Co. (eventually acquired by BP in 1999). Shares were held in the following proportions: 23.75% each to the Anglo-Persian Oil Company, Royal Dutch Shell, the Compagnie Française des Pétroles (CFP, which in 1991 became Total), and the NEDC; and the remaining 5% to Calouste Gulbenkian (A Turkish businessman.) TPC was to be organized as a non-profit company, registered in Britain that produced crude oil for a fee for its parent companies, based on their shares. The company itself was only allowed to refine and sell to Iraq's internal market, in order to prevent any competition with the parent companies.

San Remo Conference 1920:

The San Remo Resolution adopted on 25 April 1920 incorporated the Balfour Declaration of 1917. It and Article 22 of the Covenant of the League of Nations were the basic documents upon which the British Mandate for Palestine was constructed. Under the Balfour Declaration, the British government had undertaken to favour the establishment of a Jewish national home in Palestine without prejudice to the civil and religious rights of existing non-Jewish communities in Palestine or the rights and political status enjoyed by Jews in any other country. Britain received the mandate for Palestine and Iraq; France gained control of Syria, including present-day Lebanon. Under the agreement, Great Britain granted France 25 percent of the oil production from Mosul and France undertook to deliver oil to the Mediterranean.

After taking a cursory look at all this evidence, it becomes clear that the establishment of a Jewish homeland in Palestine on a religious basis was merely a pretext for creating a Western outpost in the energy-rich and Arab-majority Middle East. In the fateful year of 1917 the First World War was nearing its end and the Communist revolutions were taking place in Russia. The rise of communism in Russia was a unique phenomena which threatened the industrialized nations and their hold over their colonies and the global economic order. Geographically the former Soviet Union was adjacent to the Persian Gulf countries including Saudi Arabia, Iraq and Iran which together hold over 50% of the world’s proven oil reserves (788 billion barrels out of world’s total 1477 billion barrels proven reserves.)

In the event of an outbreak of a war between the Western powers and the Soviet Union, the latter clearly had an advantage over the Western powers to capture the Middle Eastern oil resources due to its geographical proximity. Aside from such a contingency another factor which must have played a role in the thinking of the Western statesmen and policy makers is an attraction of the egalitarian socialist economic system to the people of the third world and especially the Arabs. The fact that some rudimentary socialism emerged during the Pan-Arab nationalist movements of 60s lends credence to this hypothesis.

If we look at the case for the establishment of Israel, it is so ludicrous that even refuting it seems like a waste of time. Although two arguments: religious and historical were put forward as a justification for its creation, but the historical argument didn’t hold any water unless if we take biblical history of the creation of the universe seriously. Therefore the case for Israel was exclusively predicated on the religious argument. Here we must keep in mind the demographics of Palestine in the 1920s: 50,000 Jews; 50,000 Christians; and 500,000 Muslims. If the Jews could claim Palestine on those stats than Christians were entitled too. Over the course of next few decades, the demographics were changed by shipping hundreds of thousands of East European Jews to Palestine.

Here let me clarify that I am not a Holocaust-denier, if it is too big a sin in your book; although I do deny the nuclear holocaust in Hiroshima and Nagasaki because the whole episode has been erased from our collective conscience, that was all a cooked-up story, our ‘humane imperialists’ would never have committed such a monstrous act, no matter what. May be the evil incarnate Hitler did it (unlike the goodness personified: Roosevelt, Churchill and Truman), or perhaps the Japs nuked themselves and put the blame on the innocent bystanders. But I digress.

Coming back to the topic, I feel sympathy for the European Jews who genuinely were the victims of the Nazi atrocities. But by what logic or by what norm of justice, Roosevelt and Churchill agreed to compensate the victims of the Europeans at the cost of a third party who had no business in the sordid saga? If A commits a crime against B, B is entitled to get compensation from A, but not from C which is an unconnected party. If the imperialists of yore truly felt for the Jews, they could have accommodated them anywhere in Europe. And if Roosevelt was that sympathetic to the Jewish cause, he could have settled them in Florida, California or Hawaii. But all these arguments are fait accompli now, but a fait accompli with horrendous consequences, not for the imperialists but for the people of the Middle East region.

As I said earlier, the case for Israel was predicated on two arguments: historical and religious, historical argument is far removed from the real history and even the religious argument is merely a pretence. The secular humanists of yore never took religion seriously; in fact religion was never taken seriously by anyone in history. International politics is always about inter-state rivalries and a clash of national interests. The imperialists of yore wanted to create a Western outpost in the middle of energy-rich and Muslim majority Middle East: a settler colony which shares the values and culture of Judeo-Christian civilization and consequently immune from the populist impulses, especially from the spectre of global communism.

With the benefit of hindsight, it appears that the West didn’t need such a settler colony when it already acquired numerous military bases all over the Middle East through its Lend-Lease agreements in which 35,000 US troops are stationed to protect its ‘vital interests’ which is a euphemism for ‘energy interests.’ The value of a land-based colony is further diminished with the emergence of the modern navies and the naval-airpower especially the aircraft-carriers which are like the mobile and floating military bases protecting the trade and energy interests of the corporate empire in the international waters, the Persian Gulf and all over the world. But the nuclear-powered Nimitz-class aircraft-carriers were only a subsequent development (1975), back in 1917 when the imperialists conceived the idea of a market-powered Zion-class aircraft-carrier: the USS Israel, they had little idea that it will become more of a liability than an asset.

Nauman Sadiq is an Islamabad-based attorney, blogger and imperial politics aficionado who blogs at