Oil—The Early Years, OPEC, and Its Empowerment (1945–1979)

Abstract

As we have said in the previous chapter, the zone extending northward under the alluvial plains of the Tigris-Euphrates basin contains around 55–60 percent of the world’s known conventional oil reserves. The two richest fields found in the history of man—Ghawar and Burgan—lie along the southwestern shore of the Persian Gulf, in Saudi Arabia and in Kuwait, respectively. Although bitumen and natural gas were exploited in the region millennia ago, commercial oil production in the Persian Gulf started slowly at the turn of the twentieth century (with accelerating exploration and production after World War II), and until the 1960s, foreign oil companies backed by their national governments had total control of the region’s oil industry. These companies refined products abroad for their foreign clients, gave the oil-producing countries very little compensation for their crude oil, and earned above-average returns for their foreign shareholders. The oil companies, with the well-deserved nickname of “Seven Sisters” or “Majors,”—Standard Oil of New Jersey (Exxon), Standard Oil of New York (Mobil), SoCal, Gulf Oil, the Texas Company, Royal-Dutch Shell, and British Petroleum—plus CFP, established corporate control over Middle Eastern oil early in the twentieth century.