Oil Revolution: An Interview with Chris Dietrich

Christopher R. W. Dietrich, Oil Revolution: Anticolonial Elites, Sovereign Rights, and the Economic Culture of Decolonization. New York and Cambridge: Cambridge University Press, 2017. 366 pp. £27.99 (paperback), ISBN: 9781316617892.

Interviewed by Marc-William Palen

Chris Dietrich’s Oil Revolution innovatively uncovers the entwined history of “black gold,” decolonization, capitalism, and sovereignty in the postwar world. I recently had the opportunity to interview him about his book, which tackles big historical questions surrounding the ideas, policies, and networks of anticolonial elites after the Second World War, stretching from the Middle East to Algeria, Libya, and Venezuela. Dietrich’s wide-ranging story describes how these same elites were able to rewrite the rules of the global oil industry and Decolonization.

Prof. Dietrich is Associate Professor of History and Director of American Studies at Fordham University. He is the editor of the multi-volume Blackwell Companion to the History of U.S. Foreign Relations. His publications include articles in Diplomatic History, the International History Review, Itinerario, and Diplomacy and Statecraft. He also frequently writes historically centred editorials, including for the Imperial & Global Forum. You can follow him on Twitter @CRWDietrich

How would you summarize your book?

The book excavates the ideologies and policies of two generations of anticolonial oil elites in the era of decolonization, more or less from 1950 to 1975. It analyzes the twists and turns in their attempts to use newly popular theories of development economics and international law to make an argument for their nations’ economic sovereignty in the form of control over the production and price of oil. I undertake this general examination through chronological chapters on the origins and influence of new ideas about development economics and international law, with a close eye at the connected group of protagonists that navigated the international political economy through specific events such as the Iran oil nationalization of 1951, the 1956 Suez Crisis, the 1958 Iraq Revolution, the first Arab Petroleum Congress in 1959, the founding of OPEC in 1960, the creation of new oil laws in Libya, Iraq, Saudi Arabia, and Iran in the 1950s and 1960s, the Arab oil embargo of 1967, the 1969 Libyan Revolution, OPEC’s breakthrough in 1971, the second Arab oil embargo of 1973 to 1974, the fourfold increase in oil prices then, and, finally, the declaration and failure of the New International Economic Order of the 1970s.

Could you explain the rationale behind your title, Oil Revolution?

Sure. OPEC, the Organization of Petroleum Exporting Countries, is at the center of this history. But scholars, with important exceptions, often look at the consequences of OPEC members’ policies rather than their causes. When U.S. historians and historians of other industrialized nations think of the oil price increases beginning in 1973, they think of the “energy crisis,” the “oil shock,” or the threat of “petrodollars” to the international financial system. This analytical viewpoint and its corollaries, from long lines for gasoline to Cadillac Sheikhs to Zbigniew Brzezinski’s “Arc of Crisis” and the Carter Doctrine, makes sense from the perspective of the United States and the other major consuming nations. In the 1970s, those nations already faced a general crisis with the end of Bretton Woods and, in the United States especially, the quadrupling of oil prices was quickly linked to the already tenacious problem of high inflation, as well as to the loss of national purpose associated with Vietnam. Political-economic instability had potentially globe-shattering consequences, many policymakers believed, and one part of U.S. policy was to vilify the OPEC ministers as a threat to the health of the global economy.

Such depiction of oil sheikhs was undoubtedly a caricature even then, but it also served to obscure the ideology and political, economic, and diplomatic strategies of OPEC member states. It is interesting that OPEC also had widespread support in 1973 and after, and among the oil producers and other Third World nations, the price increases were widely discussed as an “oil revolution.” This was because the group of people I focused on in this book, anticolonial oil elites, had worked over the previous quarter century to overturn what energy historian Daniel Yergin famously called the “concessionary regime” – the series of contracts negotiated for oil exploration and production in the 1920s and 1930s that were largely considered a legacy of colonialism. The first Secretary General of OPEC, Fuad Rouhani, even took issue with the term oil “concession” itself, as concession implied the weak yielding to the powerful.

From this perspective, the energy crisis of the 1970s was not only about a shift in the global balance of supply and demand – although it was that – it also had a longer political, economic, and legal history. That history, I found, was not only driven by the profound transformation of decolonization, it was also dominated by attempts of different nations and groups of nations to use national sovereignty to overturn what were often described as “unfair prices” for oil and other raw materials. This project was deeply steeped in a broader world that emphasized decolonization as an ongoing project of independence that moved beyond the official political sphere – or “economic emancipation” as OPEC members, the Non-Aligned Movement, or the G-77 nations at the UN had it.

Your book brings together the histories of nations, international organizations, global intellectual movements, Decolonization, the Cold War, non-alignment, economic culture, and natural resources. This is, to say the least, an impressive achievement. How did you approach this daunting task?

To approach it as a daunting task would imply a sense of purpose that did not exist at the beginning of this project. Whether historians admit it or not, this is probably true for much of what we write, and our narratives are driven by what we find in the archives.

The first time I really began to think about anticolonial elites was probably when reading through the minutes of the 1958 Law of the Sea Conference, at which the Arab nations walked out because of the Aqaba Clause, for a background section on a dissertation chapter on the Six Day War and 1967 Arab oil embargo.   My interest in anticolonial elites as a coherent group began to pick up after the 2012 Decolonization Institute through the National History Center in Washington, D.C. Afterwards I planned research trips to the OPEC Library in Vienna and the UN archives in Geneva, both of which were incredibly helpful. I am also deeply thankful for Interlibrary Loan at Fordham, as they were able to get ahold of as much of the published and non-published work I could find by people like Mahmood Maghribi, the Libyan oil minister in the early 1970s; Hasan Zakariya, the Iraqi oil lawyer; or Mohammed Bedjaoui, the Algerian lawyer and international civil servant, to name just a few.

On the question of elites, these are elites, no doubt. They were not the Arab “man on the street” often identified by some diplomats (a close relation to popular descriptions of Latin American oil nationalists a generation earlier). They were western-educated lawyers, economists, geologists, engineers, journalists, and diplomats whose lives crisscrossed the globe, and whose circuits connected through the nodes of international groups like OPEC, the Arab League, or the UN Economic and Social Council. To follow their academic and political careers is to trace a history economic sovereignty in the decolonizing world, especially in the overlapping fields of international law, development economics, and the oil industry.

Many histories have been written exploring the connection between oil and colonialism. Why is it that the connection between oil and anticolonialism has, until recently, received far less attention?

I’m not sure. There is lately a lot of really good work out there on many topics related to energy – on development in the Middle East, Arab Americans and U.S. foreign relations, OPEC, petrodollars, American missionaries, the large multinational oil companies, European energy and military power in the first half of the twentieth century, European national companies, labor movements, and U.S. foreign relations with states like Iran, Iraq, and Saudi Arabia.

For me it is interesting to look at this literature, and it reminds me that the 1970s oil price increases were not just cases of economic statecraft by nation-states – although they were certainly that – but also emerged out of the political, economic, and legal debates about the shape of the globalizing economy. One of the main contexts that shaped these debates and that world was decolonization. My work on oil and anticolonialism is also part of a much larger collective project that encompasses new histories of intellectual, political, and policy history of decolonization. It is an exciting time to be an international historian of the twentieth century, as many scholars are applying the traditional methods of diplomatic and political history as well as newer focuses on culture, the environment, ideology and others to important people and groups that haven’t received as much attention as they probably warrant.

Your book’s main actors are transnational anticolonial elites often coming from disparate geographies, backgrounds, and cultures. Who were they, and what is it that tied them together?

The book has an appendix that identifies the main characters, their education, and their professional positions. They include development economists and international lawyers, oil ministers from the OPEC nations, and functionaries within OPEC and the United Nations. It should be noted here that this was a period of great mobility, and that many of these actors changed jobs according to circumstances. The Iraqi oil minister until the 1958 revolution, for example, later helped write Libyan oil laws in the 1960s. To take another example, one of the men charged with Libyan oil policy in the 1970s first worked in the OPEC Legal Department in Vienna.

Another shared experience was graduate education – in law, economics, or geology – in the United States or Western Europe. They took advanced degrees, largely in law, economics, or geology.

Finally, this was a group that was self-aware from the early 1950s on. In other words, they knew that they shared a political, economic, and legal project and talked about it quite a bit. I didn’t write about this much in the book, but I was also impressed by the ways in which technology and infrastructure facilitated their connection. Air travel, of course, but also the ways they worked to produce and disseminate information. In one example, the OPEC Legal Department, inspired in part by the UN Commission on Permanent Sovereignty, began a process of collecting and reproducing all of the oil legislation of its member nations in a series called Strategic Documents of the International Petroleum Industry. Another example was also really interesting and telling to me: the publication of a 1979 New International Economic Order insert, masterminded by the editor of Le Monde and funded, through the UN, by a Japanese shipbuilder, ultimately published with local op-eds in 16 nations.

So, they are most importantly linked together by their ideas, which weren’t formed in a vacuum but rather in the context of the world they inhabited. They attempted to develop a coherent, unified policy.

They also worked through specific institutions: the Arab Petroleum Congress; OPEC; the Economic and Social Council, Permanent Sovereignty Commission, and Conference on Trade and Development at the United Nations; subcommittees formed by the Non-Aligned Movement; newspapers like Arab Oil & Gas and Review of Arab Petroleum Economics; and smaller groups like national bar associations and regional economic summits.

Could you elaborate on what you refer to in your book as “the economic culture of decolonization”?

Sure. The struggle to understand and shape decolonization was always multidimensional, and this idea builds off of the institutional and ideological history I’ve just described. The anticolonial elites, both those from oil-producing nations and those without oil, shared a world of common beliefs. They met often, corresponded frequently, and felt as if they faced a reality in decolonization. In that shared world, they perceived different possibilities in their drive to make national independence, statehood, and membership in international society meaningful in terms of taking control of oil production and price.

From that broad base arise more specific points. I talk about this a lot, and I mean a lot, in the book [laughs] so I will focus on just a couple. First, the anti-colonial elites formed a coherent group that sought to understand the conditions of economic possibility that came with the end of empire and what they and others often thought of as a rise of self-assertion in the 1950s and after. They held a shared vision about the potential of national independence in the international economy, which included a particular reading of the past and a series of attitudes and policies meant to shape the future. Second, they were prodigious writers and speakers, as I said earlier, they meant to circulate their knowledge. That knowledge was based on shared assumptions about history, law, economics, and diplomacy.

Whether they were Latin American development economists, Middle Eastern policymakers, or the functionaries of international organizations, they united around a common set of problems and a common sense of purpose. No less important than decolonization, in other words, was the way in which people framed its possibilities.

The existence of such a shared world was especially true for professionals who developed expertise in international law and in development economics. In the latter, they all believed in some form of what was commonly understood as the terms-of-trade thesis, following Raúl Prebisch and Hans Singer. Other development economists of the time also made similar arguments about low raw material prices and economic inequality, people like Gunnar Myrdal or Ragnar Nurske, for another. In terms of international law, a number of anticolonial elites began to emphasize sovereignty as a means to overturn the economic inequality they believed to have emerged from the colonial era. Many of them began to critique older legal arrangements as remnants of a bygone colonialism and, beginning in the early 1950s, worked through international society to legitimize their arguments.

So the story is more than just one about ideology and cultural underpinnings. But understanding the meaning of decolonization was crucial for taking the action that decolonization made possible. The shared culture of decolonization also led to interchanges that had legal, economic, and policy ramifications. I think this is true more broadly, but my interest in this book was to explore those ramifications in terms of ownership over oil, the supply of oil to what U.S. leaders commonly called “the Free World economy,” and the price of oil. To understand how and why those changes took place, we need to understand the longer story of the debates over the control of oil. I suppose this is what I hoped to get at by delving into the “economic culture” of decolonization and its consequences for the oil industry.

You link together the global politics of oil with international economic justice. Most people wouldn’t immediately associate the one with the other. Could you explain the connection?

From the very beginning of post World War II international history, oil was connected to the question of decolonization. The group of actors I studied, whose ideas and policies became very influential in the 1970s, thought that decolonization was an unfinished project and in that context took the question of international economic justice seriously. The world that the oil elites occupied wasn’t only about oil. It was also, among other things, about sovereignty. A detailed reconstruction of the lives of oil elites reveal that deeper legal influence over what U.S. historian Edward Meade Earle once called “oleaginous diplomacy.” The creation of this argument and its employment in national oil law, drew upon individual elites’ expertise.

In the book I track that broad story through a series of chronological analyses of debates about and changes to oil concession law, which culminates in the OPEC members taking control over the price and production of oil in 1973 and 1974. The first part begins with debates about permanent sovereignty over natural resources in the UN Economic and Social Council, which occurred around the topic of the 1951 Iranian oil nationalization. I follow the discussion of sovereignty after that through the Arab League participation in the 1955 Bandung Summit, the early policies of the Arab League Petroleum Bureau and the UN Permanent Sovereignty Commission, culminating in the First Arab Petroleum Congress in 1959 and the founding of OPEC in 1960.

The second part of the book examines the spread of sovereignty-driven legal and economic arguments in international society, with a special emphasis on the politics of oil, in the 1960s. It pays close attention to people like the Venezuelan economist Francisco Parra and the Iraqi lawyer Hasan Zakariya, both of whom worked for OPEC, as well as the great critic of the oil industry, Abdullah al-Tariki. It tracks the OPEC Royalty Negotiations of 1962 to 1965, the division among oil producing nations between gradualists and insurrectionists, and discussions in the United Nations and among international lawyers about sovereignty and natural resources. It ends with an analysis of the 1967 Arab oil embargo.

The 1967 war really changed the international oil industry, but not in the ways you might think. I emphasize two important consequences of the war: the British scuttle from East of Suez, which greatly improved Iran’s bargaining position with its oil concessionaires, and the Libyan Revolution, which transformed the oil relationship there. I don’t want to go into too much detail here, but it was interesting to see how these consequences helped come together with other elements to create a moment in which the oil producers had a lot of bargaining power. They used it powerfully from 1970 to 1973 to transform the international oil industry. The actors I focused on – Mahmood Maghribi of Libya, Jamshid Amuzegar of Iran, the oil consultant Nicolas Sarkis, and Ahmed Zaki Yamani of Saudi Arabia, for example – all had shaped their understanding The way they used that power arose from the legal and economic foundations of the previous two decades, and it is a fascinating story that culminates with the 1973-1974 energy crisis and the declaration of the New International Economic Order at the United Nations.

What role did the “oil revolution” play in the New International Economic Order (NIEO) of the 1970s?

Great question. As I have already said, the question of oil control had been linked to the broader debate about economic justice and the pernicious effects of economic colonialism since the early 1950s.

High oil prices – the price increased fourfold from November 1973 to February 1974 – catalyzed the international discussion that led to the calls of the NIEO to reform the international economy along more just lines. This is because many – including leaders of oil-producing nations, and Algeria played a key role in this – saw the higher oil prices as a victory in which the oil producers had achieved a sort of economic decolonization.

The key actors here also point to the longer connection between anticolonialism and oil. Take for example Manuel Pérez Guerrero. Interestingly, Pérez Guerrero was the director of the UN Conference on Trade and Development in 1974 when Algerian President Houari Boumedienne called for the special session of the UN General Assembly that ultimately produced the call for the New International Economic Order. He wrote his friend Enrique Iglesias, the economist not the singer, that he hoped other commodity producers could build on OPEC’s success.   This was a position that made since for someone who had written his 1936 law school thesis on the League of Nations and “universal international law,” had been a member of the visiting Venezuelan delegation to the first Arab Petroleum Congress, and was then the Venezuelan oil minister.

He and many others were dismayed when their hopes were dashed. And that is where the book ends, with the flaring out of the New International Economic Order.

What are your book’s big historical lessons or takeaways for today?

In some ways, the sovereign rights program was a failure. In the shortest formulation possible, the sovereignty of the oil producers created a financial crisis, and one outcome of this was the rise of sovereign debt.

But the anti-colonial elites’ way of looking at the world had other lasting consequences. I write at the end of the book about the balance between failure and success of the sovereign rights program, and more broadly reflect on the broader consequences of decolonization. From the perspective of the Algerian jurist Mohammed Bedjaoui, decolonization had conferred collective strength “upon the LDCs by their joint action in world affairs,” and had allowed a new group of actors the potential to “be instruments of change.” From the 1950s to the 1970s, the anti-colonial elites created a program that they believed would bring about a more human international society than the colonial era that came before. They insisted through international law and development economics that the international community had responsibility for redistributing wealth.

This was a flawed attempt with inherent tensions, often based on the conflict between national and international interest. But if there was a past for this sort of effort, there might be a future.

The oil price increase and redistributive arguments of the New International Economic Order also engendered a strong response. Many new policies and core beliefs that have since been lumped under the terms neoliberalism and globalization were worked out in response to the arguments about sovereign rights at the roots of the energy crisis and the New International Economic Order. This is true in the international political economy, national security, and U.S.-Middle East relations. Even scholars should be reminded sometimes that processes we assume to be natural or outcomes that seem predetermined were never really so.

In the end, events like the energy crisis, or as the anti-colonial elites had it, the “oil revolution,” and the New International Economic Order will continue to benefit from deep historical analysis. History provides us with a better understanding of the complex political, economic, and legal questions surrounding oil, sovereignty, decolonization, and the international political economy. I don’t think it is too much to hope that with a better understanding of the combination of interests and ideology that inform economic diplomacy, it may be possible for our leaders make more cautious and better policy decisions on any range of issues.

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