The Battle for Oil in the First World War

At the beginning of the 20th century, the Great Powers competed for the vast oil reserves around the Iraqi city of Mosul. The motivation – and prize – was energy security. 

An Iraq Petroleum Company oil well on fire, 1932. Library of Congress. Public Domain.

The moment came at three o’clock on the morning of 14 October 1927, at an exploratory oil well 100 miles south-east of Mosul, at a place called Baba Gurgur. As the drill head passed 1,520 feet, it encountered an oil horizon under considerable pressure. Crude oil rushed up the bore hole, flooding the surrounding wadi and forming an invisible cloud of gas that asphyxiated five members of the drilling team. The gusher ran out of control for over a week at a constant flow of 90,000 barrels of ‘sweet’ (low-sulphur) crude a day. For the Turkish Petroleum Company (TPC), established in 1912, it was the culmination of 15 years of intrigue, diplomacy and exploration. For Iraq, declared a British mandate seven years before, new-found oil promised new-found sovereignty. The royalties from oil would, it was believed, transform what had been a distant vilayet (province) of the Ottoman Empire into an independent state, with its own infrastructure as well as an emerging national identity.

In 1927 ‘Middle East’ and ‘oil’ were far from synonymous. World markets were dominated by US exports, notably those of the Standard Oil Company of New Jersey (now ExxonMobil). Baba Gurgur was separated from both the Persian Gulf and the Mediterranean by hundreds of miles of forbidding terrain, some of it uncharted. Millions of pounds would have to be sunk into more wells, pipelines, terminals and refineries before a single drop would come to market. A British firm, the Anglo-Persian Oil Company (which became British Petroleum, or BP) had struck oil in neighbouring Iran in 1908, but it had taken years to bring kerosene to market.

Events elsewhere highlighted the risks associated with the oil industry, both geological and political. The rich wells of Mexico’s ‘Golden Lane’, around Tampico and Tuxpam on the country’s east coast, had turned to brine, while the long history of commercial oil production in the Caucasus had been suddenly cut short in 1920, when the Red Army seized the area, after which the new Soviet government nationalised the oilfields around Baku and Grozny.

An oil gusher at Kirkuk, c.1932-33. Library of Congress. Public Domain.
An oil gusher at Kirkuk, Iraq, c.1932-33. Library of Congress. Public Domain.

At first, the stakes had been small. For centuries mankind had exploited and sometimes revered naturally occurring ‘eternal flames’ caused by seepages of oil and gas. Baba Gurgur derived its name (which translates as ‘Daddy Fire’) from one such natural curiosity. Pitch was used medicinally, as well as to caulk boats. Only in the second half of the 19th century, however, did commercial drilling begin, along with the refining of crude oil into kerosene, to be used for lighting. By 1910 it was clear that another oil product – gasoline – had overtaken steam and electricity to become the driving force behind the motor car. Two years later the Royal Navy decided to convert its fleet from coal- to oil-fired engines.

The need for secure supplies of oil became urgent during the Great War. Though the term did not yet exist, ‘energy security’ had been born. Control of oil-bearing lands, of pipelines, refineries and the oil companies that built them was essential to national and imperial defence. By the middle of the 20th century, oil and its derivatives had become much more than just an industry. Oil was a way of life: one of ease, convenience and mobility, to which the world’s expanding population continues to aspire, even as the associated environmental costs have become impossible to ignore.

The race to claim Mosul’s resources pitted sheikhs, sultans, shareholders and statesmen against one another. They staked their claims in different ways: as conquerors, as holders of certain hereditary or legal titles, as investors, as opportunists, as trustees for an absent ‘people’ or ‘national interest’. I will focus, for simplicity’s sake, on four specific episodes in which some of these would-be claimants faced each other to contest who should – and who should not – control Mosul’s oil. This struggle took many forms: from the local tribe seeking to make its claims in terms that distant powerbrokers in Istanbul, Berlin and London would recognise, to an aristocrat trying to maintain the niceties of high diplomacy in the face of new powers and new men.

Mosul: The Sheikh and the Sultan 

Sheikh Tabour bin Sheikh Hussein El Ayoub and Agop Ohanian visited the office of a notary named Ekrem El Farouki bin Hassan in Sheikh Omar Street, Mosul on 19 October 1919. The former was head of the local Jabbour tribe, the latter a merchant. Both were subjects of the Ottoman Empire, though they belonged to different millets (ethnic communities): the sheikh was an Arab, the merchant Armenian. They had joined forces to seek compensation for lost revenue from Sheikh Tabour’s oil wells and had come to put the facts on record in a sworn statement. Sixty years before, the sheikh’s father had been granted permission by the sultan to cultivate what was then waste land around Baba Gurgur. He found natural sources of bitumen, which he began to mine, selling it in Mosul. Then Petrus, an Armenian friend, advised him to dig deeper wells in the hope of finding oil. Petrus offered to seek advice the next time he visited distant Istanbul, the capital of the Ottoman Empire.

Unfortunately for the sheikh, Petrus contacted a fellow Ottoman Armenian, Agop Pasha, who served as Minister of the Civil List, administering those estates and investments which the sultan claimed as his personal property. The Civil List was thus distinct from the Imperial Treasury. Starting in the 1880s Agop had been appropriating the most promising oil lands around Mosul for Sultan Abdülhamid. Like many others, the sheikh fell victim to classic rent-seeking behaviour by the sultan: agents were sent out from Constantinople who informed him that the lands were now sanniya (crown lands).

Iraq Petroleum Company workers laying a pipe line south of Kirkuk, Iraq, 1932. Library of Congress. Public Domain.
Iraq Petroleum Company workers laying a pipe line south of Kirkuk, Iraq, 1932. Library of Congress. Public Domain.

The concession to ‘mine’ petroleum in this area of 12 square miles was subsequently sold to a contractor. Sheikh Tabour received only a token share of the royalty that the contractor paid the sultan. Today, oil is measured in barrels and travels in pipelines and tankers. The only ‘pipeline’ in the Ottoman vilayet of Mosul in 1919 was the river Tigris. Animal skin bottles did the work of barrels. The sheikh’s royalty thus consisted of a mere 25 piastres on every raft of 500 skins floated down the Tigris towards Baghdad.

In 1914 the Ottoman Empire allied with Germany. The German Brennstoffkommando Arabien, or militarised oil survey, duly visited Mosul looking for oil. They ‘brought with them machines and other implements for digging up wells and extracting oil and benzine for supplying their aeroplanes and motor cars with their requirements, in Mosul, Syria and Palestine, for the purpose of protecting their war lines’. They paid Sheikh Tabour even less by way of royalty. By the time redress came from Berlin, it was too late: the British had occupied Mosul. They had arrived three days after the armistice signed between the British and the Turks had come into force. The British clearly wanted to establish ‘facts on the ground’ before peace negotiations began. The local Commander in Charge and Political Officer for Mosul, Colonel Leachman, listened politely to Sheikh Tabour’s complaints: ‘But till now nothing has actually been done.’ Nothing ever would.

Copies of these depositions found their way to the National Archives outside Washington. The documents offer a window onto the earliest phase of commercial development of Mosul oil, yet appear out of place filed amid correspondence among powerful oil executives and diplomats. Historians pass over them, as matters of no importance. To cite Sheikh Tabour’s last deposition (1922), his family’s complaints ‘remained fruitless as they were tribesmen and of weak position’. Yet they reveal much: about endemic corruption under Abdülhamid, about the western powers’ ignorant disdain of unfamiliar forms of property rights and about the fascinating, multi-ethnic nature of the Ottoman Empire. Armenians served as the commercial intermediaries to sultan and sheikh alike. As with the Jews of medieval Europe, such dominance bred resentment and suspicion, fuelling the Armenian Genocide of 1915.

Istanbul: The Grand Vizier and the Ambassadors

The British and German ambassadors visited Abdülhamid’s Grand Vizier, Said Halim Pasha, at the Sublime Porte in Istanbul on 23 March 1914. Sir Louis Mallet and Hans Freiherr von Wangenheim requested that the oil concession for the two vilayets of Mosul and Baghdad be granted to TPC. Thanks to an agreement hammered out in London just four days before, 25 per cent of TPC was now owned by Deutsche Bank. Another 25 per cent belonged to the Anglo-Dutch oil company Royal Dutch-Shell. The remaining half belonged to Anglo-Persian. By persuading the three rivals to join forces, TPC’s founder Calouste Gulbenkian broke the logjam that had prevented any single company or nation from securing the concession.

One might wonder why Sultan Abdülhamid did not exploit Mosul’s oil by himself, as he had been snaffling up the regions’ most promising oil fields for decades. Unfortunately, while there was sufficient money in the Imperial Treasury to hire geologists to carry out surveys, there was nowhere near enough to acquire drilling equipment and to lay pipelines. Years of armed conflict to defend its Balkan and North African territories from western powers and the irredentist movements they supported had left the Ottoman Empire hugely indebted.

As this debt was in European (largely French) hands, Ottoman ministers found their room for policy-making curtailed. Increases in customs duties, intended to bolster revenue, could only be made, for example, with the approval of the Ottoman Public Debt Administration, which represented western European bondholders’ interests. Loans to the Ottoman Empire came with strings attached: funds borrowed from a French-controlled bank, for example, could only be spent on buying artillery pieces from Schneider, a French armaments firm.

Sultan Abdülhamid II, c.1890. Library of Congress. Public Domain.
Sultan Abdülhamid II, c.1890. Library of Congress. Public Domain.

German loans, by contrast, came with different shopping lists. Artillery pieces were to be purchased from Germany’s industrial giant Krupp and railway construction contracts were to go to companies controlled by Deutsche Bank. Given the crumbling state of the Ottoman Empire, few in Paris, London or Berlin thought it would last long, but there was good money to be made before the music stopped. Banks issued huge amounts of debt, arms companies sold guns and shipyards sold dreadnoughts. Nobody thought very hard about what would happen when the Ottoman Empire defaulted again (as it had done in 1875), or when the arms race they were directly fostering (between the Greeks and the Ottomans, for example) escalated into war. Perhaps this French, British and German fiscal, industrial and military complex simply looked to their governments to bail them out, by seizing assets or territory.

In 1914 the Empire was already divided up into British, Russian and French ‘spheres of interest’, while the Italians had taken Tripoli in a brief war (1911-2) and were trying to claim their own ‘sphere’ in south-west Anatolia. The Ottoman Empire in 1914 was a vast superstructure of often overlapping claims by foreign powers: a Jenga tower, whose pieces were continuously being rearranged (and new ones added). While Britain, France, Germany, Russia and even Italy had already worked out which pieces they would grab when the time came, none wanted to be held responsible for upsetting the tower.

A river of crude oil as a result of an uncontrolled gusher, 1932. Library of Congress. Public Domain.
A river of crude oil as a result of an uncontrolled gusher, 1932. Library of Congress. Public Domain.

In the years between 1900 and the outbreak of the First World War, legions of rival British, German and US concession-hunters had flocked to Istanbul, jostling in the Pera Palace Hotel. Each sought an exclusive concession to exploit the oilfields of the vilayets of Mosul and Baghdad, but succeeded only in lining the pockets of Abdülhamid’s venal entourage. The Grand Vizier and other ministers held back from awarding the concession to any one bank or company, for fear of reprisals from the others – or rather, from whichever power considered that ‘their’ firms’ claims had been overlooked.

The Grand Vizier would have been used to seeing the German and British ambassadors separately regarding Mosul’s oil; reassuring the former whenever it seemed that the concession might go to Anglo-Persian and the latter when it seemed that Deutsche Bank might be winning the race. He was clearly not expecting an Anglo-German entente in March 1914. As Mallet reported to the Foreign Secretary, Edward Grey, Said Halim ‘started’ and ‘needed smoothing down’ when he heard that TPC not only had its eyes on Mosul, but planned to also exploit the Nejd (the Arabian peninsula).

‘The Turks want to make what they can out of their oil’, Mallet continued, ‘which is a natural aspiration in view of their impoverished condition.’ Like the Grand Vizier, Mallet was surprised that Grey had formally supported an Anglo-German joint-venture – TPC – in order to exploit the Empire’s oil. ‘I suppose the reason for letting the Germans have a share in the Nejd oil fields, which surprised me at first, is that we shall be in a better position to fight the [US] Standard Oil by uniting with the Germans – but this is only surmise.’ For his part, Said Halim recognised that he had no choice, at least not if he wanted to get the Great Powers to agree to allow him to increase Ottoman customs duties to 10 per cent. The concession to exploit the two vilayets was promised to TPC in a Lettre Vizierielle issued on 30 June 1914, just three months before the outbreak of the First World War.

London: The Welsh Wizard, the Premier and the Grocer

On Sunday 1 December 1918, Prime Minister Lloyd George met his French counterpart, Georges Clemenceau, at the French Embassy in London. Germany and the Ottoman Empire were defeated and the Jenga tower had collapsed, leaving the victors to reconfigure Anatolia and the Middle East. Under an agreement reached in 1916 between the British diplomat Mark Sykes and his French counterpart François Georges-Picot, France was to secure a postwar protectorate over a triangular Syrian territory extending east to Iran, including Mosul. At their unminuted meeting the ‘Welsh Wizard’ somehow persuaded Clemenceau to abandon French claims to Mosul, allowing it to be incorporated into the British sphere of Mesopotamia.

Thanks to Admiral ‘Jacky’ Fisher, Britain had begun to recognise the importance of securing oil supplies before the Great War broke out. His thinking lay behind the decision by the British government to part-nationalise Anglo-Persian in 1914, acquiring a 51 per cent stake in it. This remarkable decision to go against decades of Gladstonian laissez-faire had been lubricated by discreet lobbying by another (retired) admiral, whom Anglo-Persian had wisely decided to put on their payroll. Backroom influence-peddling was not the sole preserve of ‘oriental’ regimes, after all. In late 1918, similar lobbying of Maurice Hankey, the secretary of the War Cabinet, by unidentified ‘people with knowledge of oil production’ had led to Mosul becoming a British war aim. Hence the armistice-defying race north to Mosul in November 1918.

France had been slower to recognise the importance of energy security. At the start of the war the French army had just 316 trucks, cars, tractors and planes. In 1918 they had 97,279. France had no oil of its own, apart from a trickle from Pechelbronn in north-east France (inconveniently close to the German border). Its tiny oil industry consisted of a tight cartel of refiners, which depended on Standard Oil for its crude. Many in the French elite shared Clemenceau’s reported disdain for a grubby business. ‘Whenever I need oil’, Clemenceau supposedly sniffed, ‘I ask my épicier’ (épicier, or grocer, being the pejorative term for any small-time businessman).

A crowd in Baghdad gather to hear the proclamation about about the British capture of the city, March 1917. Library of Congress. Public Domain.
A crowd in Baghdad gather to hear a British proclamation following the capture of the city, March 1917. Library of Congress. Public Domain.

Acute oil shortages in March and April 1917 left Clemenceau begging US President Woodrow Wilson for increased supplies. A lesson, however, seemed to have been learned. As the French ambassador told the British Foreign Secretary Arthur Balfour in January 1919: ‘The war has brought to light the grave inconvenience of the French position as regards petroleum. In order to ensure that the needs of the people and of National Defence were satisfied, my Government saw clearly that it was not sufficient to enter into contracts with the big producing and trading oil companies.’ A stake in oil production had become a prerequisite of Great Power status.

Like the British and the Americans, the French formed a special government department to supervise petroleum supplies, formulate policy and coordinate various civil, military and naval departments. These were staffed with oil company executives on secondment; even private enterprise could learn to like state intervention. It provided opportunities to stymie rivals and create monopolies, while appearing ‘patriotic’. As we have seen, Anglo-Persian had shown itself to be more talented at lobbying the British state than at producing oil. In March 1914 it had persuaded ministers that its Anglo-Dutch rival, Royal Dutch-Shell, was in fact German-controlled. Three months later, the First Lord of the Admiralty, Winston Churchill, stated in the House of Commons that Royal Dutch-Shell had shown itself willing to help Britain ‘for a price’, a remark which stung company chiefs Henri Deterding and Marcus Samuel. As it happens, the war had demonstrated that the Allies could be sure of Shell.

British soldiers on picket in Iraq durong the First World War. Library of Congress. Public Domain.
British soldiers on picket in Iraq durong the First World War. Library of Congress. Public Domain.

If the war had answered this question, it had left many others open. Energy security was indeed a matter of national importance, but how could Great Powers achieve that security in the case of oil? By ‘physical control’ – that is, by seizing and holding oil-bearing regions such as Mosul through force of arms? By nationalising, controlling or otherwise supporting certain oil companies so as to bring their policy in line with state policy? Or, at the other extreme, by forswearing imperialism and economic ‘spheres of influence’, allowing a variety of multinational companies to develop oil fields across the globe, fostering a thriving free-market in times of peace as well as of war? Even Sykes recognised that talk of ‘spheres of influence’ was sounding anachronistic in 1918. In the era of President Wilson’s 14 Points, ‘physical control’ was best exerted by proxy, through protectorates, mandates or puppet states.

Lloyd George and Clemenceau’s agreement continues to flummox historians, particularly French ones, who have tried to claim that Clemenceau’s apparent ‘gift’ was in fact an exchange: Mosul was supposedly traded for British support of a proposed Rhineland republic as a Franco-German buffer state. A closer look at contemporary diplomatic traffic finds British and French officials equally flummoxed. Nobody at the Foreign Office had heard of Lloyd George’s bargain until June 1919, six months later. Nor did they think much of his plan to have a fully state-owned company exploit Mosul’s oil, shutting out TPC (Lloyd George despised Marcus Samuel and did not want Shell to profit by his Mosul grab). This entity’s activities would extend ‘from Egypt to Burmah, and from Circassia to the Persian Gulf … an offset to the great American interests’. Foreign Secretary Curzon’s marginalia (in his usual green ink) makes his view clear: ‘This is great nonsense.’

Lausanne: The Greek Temple and the Scrambled Eggs

A nationalist movement led by an army officer, Mustafa Kemal, had rallied the defeated Turks and driven a Greek invasion force into the sea at Izmir. Led from the town of Ankara in central Anatolia, the regime’s authority swelled with every defector from the government of Sultan Mehmed VI in Istanbul. In August 1920 his ministers had signed the Treaty of Sèvres, whose punitive terms partitioned the Empire between Greece, Italy, France and Britain, leaving the capital of a rump ‘Empire’ under international administration in a demilitarised zone. Two years later, British forces guarding the Dardanelles straits (also under international administration) found themselves toe-to-toe with Kemal’s triumphant troops. Faced with the prospect of renewed fighting, Lloyd George did not blink, but his backbenchers in the Palace of Westminster did, forcing him from power in October 1922.

The Sèvres treaty had been overtaken by events, necessitating a new settlement at Lausanne. The quintessential imperial proconsul, Lord Curzon had toured Persia in 1889-90 and served as Viceroy of India. He felt that he understood how to handle ‘orientals’. He welcomed the arrival at Lausanne of Joseph Grew and Richard Washburn Child, sent by the US State Department as observers. This was an opportunity to kill two birds with one stone and to give two upstart nations new to the international stage (Turkey and the US) a masterclass in Great Power diplomacy.

King Faisal I of Iraq, c.1920. Library of Congress. Public Domain.
King Faisal I of Iraq, c.1920. Library of Congress. Public Domain.

At first the contest between Curzon and his Turkish opposite number, Ismet (who became the first prime minister of Turkey, later adopting the surname Inönü) had seemed far from fair. Ismet’s cable traffic with Kemal was intercepted by British intelligence; Ismet seemed physically weak as well as partly deaf and prone to petulant rants. Among the questions on the table was the location of the border between eastern Turkey and the British mandate of Iraq, where the Hashemite Faisal had been crowned king in 1921. Did Mosul and its oil belong to Turkey or Iraq? A related question was the 1914 Lettre Vizirielle, promising the Mosul oil concession to TPC. Was this promise still in force, or was Mosul’s oil up for grabs again?

Although Curzon disliked the ‘hole and corner way’ in which oil executives sought to influence diplomats, he believed that TPC held a valid claim and that Mosul belonged in Iraq; the mountains to its north created a natural frontier. Kemal disagreed and claimed it for Turkey. He sent Turkish troops on raids deep into British-controlled Iraq. But at Lausanne Ismet struggled to get his points across. On 25 January 1923 Child wrote that ‘it was a Greek temple against a dish of scrambled eggs’.

Grew and Child sought to teach Curzon a respect for the principle of ‘the Open Door’, under which the former Ottoman Empire should be a level playing field for investment by all nations, without the preferential treatment and restrictions associated with national ‘spheres of interest’. ‘To establish the Open Door policy in Turkey would be a real contribution to the world’s peace’, Child wrote in his diary. ‘It would break the vicious connection between commercial expansion of the greater powers and their diplomacy of political intrigue within smaller nations.’

Child was aware that such principles could be seen as a means of pushing the claims of American claimants to Mosul’s oil, such as Admiral Colby Chester. The Turks saw the value of playing the Americans off against the British and awarded Chester the concession in April 1923. Without warning Curzon, Grew and Child issued a statement to the press demanding an ‘Open Door’. They also sought to unscramble Ismet. It worked. Despite ‘treatment which would make the third degree in a Harlem police station seem like a club dinner’, Ismet stood firm in the face of British and French demands during a marathon session which lasted until two in the morning: ‘I saw Ismet the next morning and he looked ten years older, but we had won our fight.’ The ‘we’ is striking. It was the first tentative step of US diplomacy into the ‘Near East’, a region in which, missionaries apart, they had almost no stake. At least, not in 1923.

Oil wells and camp of the Iraq Petroleum Company, Kirkuk, 1932. Library of Congress. Public Domain.
Oil wells and camp of the Iraq Petroleum Company, Kirkuk, 1932. Library of Congress. Public Domain.

Curzon became increasingly isolated. Thanks to a domestic press campaign to get Britain ‘out of Mespot’, Prime Minister Bonar Law was ‘longing to clear out of Mosul, the Straits [Istanbul]; willing to give up everything and anything rather than have a row’, according to Harold Nicolson. French Prime Minister Raymond Poincaré also turned on Curzon, who left Lausanne on 4 February. Talks collapsed. Though they resumed in April, Curzon did not return. To his disgust, the Lausanne negotiations ran in parallel with negotiations to reorganize TPC yet again, this time to admit both the French and the Americans.

In the end, the Americans and the French used dalliances with the new Turkish regime as well as talk of the ‘Open Door’ as a means of securing their share of Mosul’s oil. They achieved this not by ‘physical control’ but by persuading the Foreign Office to put pressure on Anglo-Persian and Royal Dutch-Shell to allow American and French oil companies into TPC. ‘The end of the Lausanne Conference is indeed a sordid anti-climax’, agreed one of Curzon’s colleagues, ‘squabbling over money and rights of capitalists, with an America fouled by oil in the background and the spirit of an insolently triumphant Angora [i.e. Ankara] government over all.’

Whose oil?

After Lausanne it was clear that room would have to be found within TPC for the Americans and the French. It took another five years to work out a final arrangement, however. This settlement was still being negotiated when Baba Gurgur roared into life in 1927. By that point the League of Nations had ruled on the Mosul border question, determining that it belonged with the rest of Iraq. On 31 July 1928 the so-called Red Line Agreement saw the US, British, French and Dutch participants agree to divide TPC five ways: the four main partners would each hold 23.75 per cent, with five per cent left over for the remarkable Anglo-Armenian dealmaker who had founded the company and steered so much of the process from behind the scenes: Calouste Gulbenkian.

Under the self-denying ordinance, these companies and Gulbenkian (who was an individual, not a company) agreed not to explore or drill within the vast area circumscribed by the eponymous red line, except through TPC. This line followed the 1914 borders of the Ottoman Empire and so included the Arabian peninsula and Persian Gulf (excluding Kuwait and Persia), as well as Mosul and the rest of Iraq. Although Mussolini’s state oil firm AGIP had a brief toehold in the 1930s, TPC (renamed Iraq Petroleum in 1929) held an exclusive concession to the country until 1961, after the Hashemite monarchy had been deposed in an army coup led by Abd al-Karim Qasim. As the Suez Crisis of 1956 demonstrated, the US had replaced Britain as Middle East hegemon, even inheriting its rivalry with Russia.

Between its establishment in 1912 and the 1928 Red Line Agreement, the constituent elements of TPC had been repeatedly rearranged. Some changes were driven by diplomatic necessity: British and German diplomats forced Royal Dutch-Shell and Deutsche Bank to admit Anglo-Persian in early 1914. When the First World War removed Germany from the picture, a new oil entente between Britain and France emerged, driven by a Francophile faction at the Foreign Office led by Edward Grey’s former private secretary, Sir William Tyrrell. Lloyd George’s Mosul grab was thus softened in a way that left some British diplomats pondering why so much had been conceded to France when its position in the Middle East was so weak. US pressure in support of the ‘Open Door’ played a role in encouraging the British to be accommodating.

It would be foolish to present the oil companies as pawns of the Great Powers. In 1903 Deutsche Bank had been cajoled by Kaiser Wilhelm’s Drang nach Osten (‘push to the east’) into investing in the Berlin-Bosphorus-Baghdad railway project. Soon, however, Mosul oil was promising to make what had been a white elephant into a cash cow. Deutsche Bank was happy to take a quarter stake in TPC, as it recognised the importance of having access to the London stock exchange’s capital reserves. Meanwhile, Royal Dutch-Shell, Anglo-Persian and Standard Oil did more than lobby the British and French governments; they manipulated them to the detriment of their rivals.

The most dramatic example of this was the contest between Anglo-Persian and Royal Dutch-Shell for control of British oil policy. In 1914 Anglo-Persian was in the ascendant, securing half of TPC practically for free. After the end of the war, however, Deterding turned the tables, in discussions intended to reassure the British government that Royal Dutch-Shell would remain under British control. Royal Dutch-Shell used these discussions to negotiate a controlling stake in Anglo-Persian and came close to pulling it off. As one company director noted, all the British government’s talk about ‘control’ was ‘very largely nonsense’, nothing but ‘a matter of sentiment’. ‘If by transferring control to the Hottentots we could increase our security and our dividends, I don’t believe any of us would hesitate for long.’ We recognise the voice of the multinational company for the first time, for whom national identities and loyalties are mere flags of convenience.

An Iraq Petroleum Company oil driller at work, 1932. Library of Congress. Public Domain.
An Iraq Petroleum Company oil driller at work, 1932. Library of Congress. Public Domain.

In establishing the National Bank of Turkey and TPC in 1909 and 1912, respectively, Gulbenkian had hoped to restore economic sovereignty to the Ottoman Empire. Both projects were supported by modernising ‘Young Turk’ reformers, whom Abdülhamid appointed to ministerial posts in the years after the so-called Young Turk Revolution of 1908. A bank and an oil company with multinational capital would, it was hoped, take the politics out of Ottoman imperial finance and economic development, as no single power would be able to push its own agenda. Unfortunately this experiment came too late. The Balkan Wars fostered increasing militarism and a racially defined national identity.

Like the troops that captured Mosul in 1918, the ‘British’ administrators who ran the mandatory regime in Iraq were more familiar with colonial India than London. As the Foreign Office noted with irritation, the Civil Commissioner for Iraq, Arnold Wilson, considered himself ‘trustee of the interests of the future Iraq state’. He was not about to hand ‘a comparatively small number of shareholders, the whole interests of the Iraq State and of the British Treasury in what might well prove to be the richest oilfields in the world’. He supported Iraqi finance minister Sasun Hasqayl in his demands for an Iraqi shareholding in TPC, rather than merely a royalty.

Attempts to foster a national identity that transcended Iraq’s ethnic and sectarian divides were undermined by British public opinion (weaponised by the Rothermere press), which demanded a rapid withdrawal from ‘Mespot’ on the grounds of economy. In an uncanny foreshadowing of today’s US drone programme, RAF aircraft were used to bomb villages who refused to pay taxes to Baghdad, or were otherwise uncooperative. Although such ‘air control’ could be presented as novel and high-tech, this was security on the cheap. Britain cut and ran, leaving King Faisal’s three million subjects in the hands of a narrow Sunni elite (when only a fifth of the overall population was Sunni). Prime Minister Nuri al-Said and the rest of what TPC came to call ‘the old gang’ engaged in the same kind of rent-seeking behaviour as Abdülhamid had. Estates appropriated by Abdülhamid in the 1890s, which had become ‘State Lands’ under the mandatory regime, were appropriated by ‘old gang’ ministers in the 1920s. Sheikh Tabour’s father would have found it all very familiar.

 

Jonathan Conlin is Senior Lecturer in Modern History at the University of Southampton. This article originally appeared in the January 2018 issue with the headline 'A Crude History of the Great War'.