Title: A Century of War: Anglo-American Oil Politics and the New World Order

Author: William Engdahl Publisher: London: Pluto Press, 2004

Reviewed by: Dr. Klejda Mulaj

Senior Researcher Gulf Research Center

n the words of its author, this book seeks to shed light on some lesser known aspects of our history, in an effort to encourage ordinary citizens to reflect on longer-term consequences of what our governments do with our mandate. The book suggests that the US agenda in Iraq was about oil, but not about oil in the simple sense many believed. This war (2003) was not an issue of corporate greed but about geopolitical power above all. Engdahls book seeks to provide an analysis of power politics centred on the politics of oil. The last century was the American Century which rested on two pillars: the uncontested roles of US military power, and of the dollar as world reserve currency. The power of the dollar and the power of the US military had been uniquely intertwined with one commodity: petroleum. As Henry Kissinger once said: Control energy and you control the nations. The British geopolitical domination, on the other hand, rested on three pillars: control of the seas, domination of international banks, and domination of the worlds raw materials. In the beginning of the last quarter of the nineteenth century, Britain embarked on a sophisticated strategy for maintaining its dominant world role through what came to be called informal empire. The notion of special economic relationships with client states, the concept of spheres of influence and balance-of-power diplomacy, all emerged from the complex weave of British informal empire towards the end of the last century. By the early 1870s, a deep economic depression had begun in Britain following a financial panic. The Great Depression of 1873 followed, and by the 1890s, the period of Britains easy leadership among the worlds industrial nations was clearly over. This set the stage for both the introduction of the geopolitics of petroleum in 1882 and how Britain was to maintain its naval supremacy. In September 1882, Britains Admiral Lord Fisher argued that Britain must convert its naval fleet from bulky coal-fired propulsion to oil, as a diesel motor issued no tell-tale smoke. It reached full power in a mere 30 minutes and peak power within five minutes, required very little men and time to provide oil fuel to a battleship and required one third the engine weight and one-quarter the daily tonnage of fuel when compared to a coal Gulf Research Center page 1 of 3

Book Review fired battleship. In 1911, Fisher was succeeded by Winston Churchill who began a campaign for an oil-fired navy. British presence in the Persian Gulf was essential to its national interest and majority share ownership of Anglo-Persian Oil (today British Petroleum) was bought up by Britain. Oil became the core of British strategic interest. During the Great War, petroleum had emerged as the recognised key to success of a revolution in military strategy. In the age of mobile tank warfare and swifter naval warfare, abundant and secure supplies of the new fuel were becoming increasingly essential. Britain had gained the invaluable military assistance of Arab forces under Sherif Husain ibn Ali, the Hashemite emir of Mecca, and guardian of the Muslim holy places of Mecca and Medina. Britain had assured the Arab forces that the reward for their help in defeating the Turks would be British assurance of full post-war Arab sovereignty and independence. Engdahl, however, argues that Britain quickly betrayed her promises to secure for herself the vast oil and political riches of the Arab Middle East, and established its military supremacy over the French area of the Middle East as well. By 1920, Britain had succeeded in gaining firm control over all of southern Africa, including former German South West Africa, as well as the vast newly discovered petroleum wealth of the former Ottoman Empire, by means of her military presence, conflicting promises, and the establishment of a British protectorate over Palestine as a new Jewish homeland. By the early 1920s, the British government controlled a formidable arsenal of apparently private companies which served the direct interest of Britain to dominate and control all the identified major regions believed to contain significant petroleum deposits. Although in 1912 Britain commanded no more than 12 per cent of world oil production through British companies, by 1925 she controlled the major part of the worlds future supplies of petroleum. Following the Second World War, however, Britain was utterly dependent on the US with the latter gaining the upper hand in world politics. Bretton Woods created a gold exchange system whereby each member nations currency was pegged to the US dollar which had emerged from the ravages of the war as the worlds strongest currency, backed by what was unquestionably the worlds strongest economy. In 1947, the US adopted the European Recovery Program (the Marshall Plan). Recipient countries used 10 percent of all Marshall Plan aid to purchase oil, which was supplied by American oil companies. By 1947, half of all western Europes oil was being supplied by five American companies. Oil had then become the most important commodity to fuel the economy. The author suggests that by early 1971 the dominant US policy was to control, not develop, economies throughout the world. President Nixon announced formal suspension of dollar convertibility into gold, effectively putting the world fully onto a dollar standard with no gold backing. No longer could foreign holders of US dollars redeem their money for gold reserves. In order to tilt the balance of power back to the advantage of Anglo-American financial interests and the dollar, a colossal assault against industrial growth in the world was launched. This was done through control of the worlds oil flows. A global oil embargo was triggered to force a dramatic increase in world oil prices which, in turn, brought with it an equally dramatic increase in world demand for US dollars, the currency used to pay for that oil. By October 1973, the Organisation of Petroleum Exporting Countries (OPEC) had raised their price by a staggering 70 per cent. The increase in oil price had an enormous benefit for the major New York and London banks, and British and American oil multinationals. In June 1978, the European Economic Community took steps to create the first phase of a European currency zone. In 1979, the European Monetary System (EMS) became operational and stabilized European currencies, thereby worrying certain circles in London and Washington as it could threaten the existing hegemony of the petrodollar monetary system. France and Germany, to the opposition of London, agreed to purchase their oil Gulf Research Center page 2 of 3

Book Review directly from OPEC countries, depositing their financial surpluses into Continental European banks and, ultimately, into the EMS. According to the Engdahl analysis, following the fall of the Shah and Khomeinis rise to power with American help in 1979, Iran singled out the countrys nuclear power development plans drawn up under the Shah and cancelled the entire program for French and German nuclear reactor construction. Irans oil exports were cut off by 3 million barrels per day with Saudi Arabia following suit. The ensuing energy crisis, nevertheless, was over by the end of 1979. In 1985, oil came to the rescue of the American economy: Saudi Arabia was persuaded to run a reverse oil shock and flood the depressed world oil market with its abundant oil. This was intended to offset inflation but, in the end, it did not do the trick. Both Britain and America were facing a financial crisis during the early 1990s. Saddam invaded Kuwait after Iraq had emerged from its costly war with Iran. Operation Desert Storm followed. Moreover, the 1990s saw the hopes for a new era of peace and prosperity dashed. In 2001, George W. Bush came to power surrounded by several members of his cabinet hailing from the oil industry. William Engdahl argues that oil and geopolitics were back on centre stage in Washington. Iraq was to become the focus of the new administration and Saddam Hussein targeted for removal. It was suggested that US policy was to be shaped to take direct military control of the Arabian Gulf attacks on Afghanistan and Iraq being the first step towards achieving this policy. The author wonders whether we have arrived at the last days of oil. Perhaps the answer is No given that new sources of oil have been already identified in Libya, Sudan, Colombia, and Venezuela in addition to Iraq. This is a book abundant with detail, written in journalistic jargon. The link between whatever has happened in world politics from 1815 to date on the one hand, and the Anglo-American quest for domination of oil on the other, may have been intended to benefit Engdahls analysis. As a single-factor explanation, however, it may be deficient. Concentrating on the politics of oil may provide some understanding of world politics. A fuller appreciation of realpolitik, nonetheless, demands that other variables be incorporated in the equation.

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