How Big Oil Dictates US Foreign Policy

The Secret of the Seven Sisters

Al Jazeera English (2013)

Film Review

Despite its length, this documentary should be compulsory viewing. Everyone with an IQ over 90 should see it at least once before they die. It was only in viewing this film that I fully grasped the insane, oil-inspired military aggression in the third world and the US fascination with despotic dictators.

The video below is actually an 8-part series shown over successive nights on Al Jazeera-English. I’ve summarized the highlights of each of the eight parts so you can fast forward to specific segments that interest you.

0.00 – 23.26

Part 1 takes viewers from the founding of the secret Seven Sisters oil cartel in 1928 to the creation of the competing Organization of Petroleum Exporting Countries (OPEC) in 1960. The latter is made up of oil producing countries that have nationalized their oil industries.*

The film begins by describing the secret (illegal) cartel formed in 1928 by the Anglo-Persian Oil Company (which became British Petroleum), Standard Oil (which became Exxon) and Royal Dutch Shell. The goal was to end the cutthroat competition that was eating into profits. At a secret meeting in Scotland the three companies agreed to an orderly division of global production zones, as well as a process for fixing oil prices.

Later Mobil, Gulf, Texico and Chevron would join these three oil giants. The existence of the cartel remained secret until the 1950s, when it became known as the Seven Sisters.

This segment describes the totalitarian control BP exercised over Iran until 1951. A strike for higher wages led to a national uprising that overthrew the Shah and resulted in the democratic election of Mohammad Mosadegh as president. When the latter threatened to nationalize Iran’s oil industry, the British government requested CIA assistance to overthrow Mosadegh and restore the Shah to the throne. In return, the US government won the right for American oil companies to join BP in exploiting Iran’s oil resources.

In July 1956 after Egyptian president Nasser nationalized the Suez Canal (the main route for transporting Middle East oil to Europe), Britain, France and Israel declared war on Egypt. Nasser responded to an aerial bombing campaign by using concrete bunkers to blockade all Suez traffic. For once, the US and USSR collaborated to pressure the three aggressors to withdraw their forces and restore the transit of oil tankers through the canal.

23.26 – 46.00

Part 2 traces how the rise of OPEC worked to gradually erode the dominance of the Seven sisters – with violent repercussions.

In 1972 Saddam Hussein nationalized Iraq’s oil industry, with technical and military support from the Soviets and the French.

By October 1973, when Israel’s Arab neighbors launched the Yum Kippur War, OPEC members controlled 60% of the global oil supply. This enabled them to launch an oil embargo against the US in retaliation for their support of Israel in the 1973 conflict.

In 1978 Iran’s Ayatollah Khomeini, living in exile in Paris, called for a workers strike in the Iranian oil industry that caused a total shutdown of oil production. This, in turn, led the US to abandon their longtime support of the Shah and his secret police. The result was a national uprising, the forced exile of the Shah, the return of Ayatollah and the nationalization of Iran’s oil industry.

Determined to regain American corporate control of Iran’s oil industry, the US government backed Saddam Hussein’s invasion of Iraq in 1980. The sudden onset of peace in 1988 led to a period of “overproduction” and a dangerous drop in oil prices. In response, George Bush senior, whose Zapata oil company had made a fortune via offshore drilling in Kuwait, openly encouraged Saddam Hussein (through ambassador April Glaspie) to invade Kuwait. This would create a pretext for the first US invasion of Iraq in 1991.

In May 2001 (20 months before the US invasion), a secret energy task force headed by former oil executives Dick Cheney and Condoleezza Rice, drew up a plan whereby Exxon, Shell and BP would divide up US occupied Iraq into eight oil extraction zones.

48.00 – 61.00

Part 3 describes the decision by the Seven Sisters to open up Africa to increasing oil exploitation due to their gradual loss of control over Middle East oil.

In 1970, Colonel Omar Gaddafi led a coup against a corrupt Libyan monarchy that was allowing the Seven Sisters to pay 12 cents a barrel in royalties to extract high quality Libyan oil. Gaddafi immediately nationalized the oil industry, raised oil prices 33% and used the funds to finance generous public services for the Libyan world and to fund freedom fighters all over the world (including the Palestinians).

This section also traces the history of the French oil companies ELF and Total in Nigeria. After Algeria won independence from France in 1971, they nationalized their oil industry, and ELF began exploiting oil resources in Nigeria, Chad, Congo, Cameroon, and Angola, where they financed guerrillas and despotic regimes and participated in bribery and embezzlement schemes that massively increased the international indebtedness of these countries. In 2003 the CEO of ELF was sentenced to prison and the company was bought out by Total.

61.00 – 95.00

Part 4 covers the role of the Seven Sisters in stoking Sudan’s civil war (most of Sudan’s oil comes from South Sudan) and the role of Shell Oil Company in Nigeria’s trial and execution of environmental activist Ken Saro-Wiwa.

95.00 – 118.00

Part 5 traces the longstanding battle between Russia and the US oil industry over control of the Baku oilfields on the Caspian Sea. It begins with Lenin’s capture of the oilfields in 1920. Hitler’s primary reason for attacking the USSR in 1941 was to gain control over Baku.

This section also details how a US-Saudi conspiracy to flood the market with oil in the late eighties (dropping the global oil price to $13) ultimately led to the Soviet collapse in 1989. At the time revenue from oil sales was the Soviet’s sole source of foreign currency.

118.00 – 142.00

Part 6 concerns the role of the color revolutions in Georgia, Armenia and Azerbaijan in keeping Caspian Sea oil out of Russian hands and under the control of US oil companies.

It briefly discusses the US role in Boris Yeltsin’s coup against the Russian parliament and his privatization of the Russian oil industry on behalf of the Seven sisters and a handful of Russian oligarchs (Putin has subsequently re-nationalized Russia’s oil industry).

142.00 -165.00

Part 7 discusses the concept of Peak Oil and the current dispute between the Iraqi Kurds and the Iraqi government over the control of the Bakr oil terminal near Bazra. At present it’s illegal for the Kurds to export their own oil. Eighty-five percent of Iraqi oil is processed at the Bakr oil terminal and Iraqi Kurdistan on receives 17% of this revenue.

165.00 – 190.00

Part 8 is about the Seven Sisters exploitation of Mexican and Venezuelan oil prior to the election of Hugo Chavez as president. It also summarizes that status of the countries (Saudi Arabia, Russia, Iran, Venezuela, Brazil, and Malaysia) that have nationalized their oil industry. At present these countries control one-third of oil and gas production, and more than one-third of oil reserves. Despite their role in instigating western military aggression, the influence of the Seven Sisters continues to declines.

At present they control 10% of oil production and only 3% of oil reserves. Their monopoly on exploration, drilling and refining technology gives them disproportionate control over the industry.

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*Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela