In Defense of the Great Satan: The Role of Colonialism in Iranian and Saudi Arabian Oil Governance

Abstract

Abstract The landscape of the global sector has undergone a massive transformation as “Big Oil” has been replaced with national oil companies, but one issue remains in question: the role of the West. Controlling approximately 70 percent of the world’s proven reserves, the national oil companies that comprise the Organization of Petroleum Exporting Countries (OPEC) must reconcile the legacy of their colonial past with their future success in the post-colonial world. OPEC’s two largest exporters, Saudi Arabia and Iran, have a starkly different relationship with the West that has ultimately affected present-day realities of their oil companies as well as the ability of these petro-states to govern. This article first examines the impact of Western influence on Saudi Arabian and Iranian nationalization narratives and identifies key drivers that have encouraged Saudi Arabia’s open cooperation with the West, while simultaneously fostering Iran’s isolationism. The paper subsequently analyzes the impact of these relationships on Saudi Arabian and Iranian oil governance, ultimately suggesting that greater Western influence tends to better overall governance. With the rise of national oil companies the shift towards symbiotic mutualism has become a necessary means for national oil companies to establish sustainable oil governance in a post-colonial context.