Oil

Abstract

Military intervention is our theme, but the oil dispute was the trigger and must be briefly explained. A concession to drill for oil in Persia was granted in 1901 to William Knox d’Arcy, an Englishman who had made a fortune in Australia. In 1905, when the drillers he sent to Persia had spent much of his money and found little oil, he joined forces with a British concern, the Burmah Oil Company. They were already supplying some oil to the British navy, then mainly coal-burning. In 1908 serious oil was struck and in 1909 the Anglo-Persian Oil Company was founded. By 1913 a pipeline carried some 30 000 gallons a day to the small refinery that had just been built on the hitherto desert island of Abadan. The wells were in the hills of south-western Persia and the island of Abadan lay on the Persian side of the estuary dividing Persia from Iraq: the Shatt al Arab.

All through 1912 and 1913 our efforts were unceasing…finally we found our way to the Anglo-Persian Oil agreement and contract, which for an initial investment of two millions of public money…has not only secured to the Navy a very substantial proportion of its oil, but…very considerable economies…in the purchase price of Admiralty oil.

Winston Churchill¹