EGEE 120
Oil: International Evolution

Introduction

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Overview

We will discuss the beginnings of oil discovery in the Middle East, specifically in Persia, the clash of British and Persian cultures, and the emergence of Anglo-Persian Oil Company. The drive to modernize and convert from coal to oil in the British Royal Navy war ships and the bitter battle between Shell and Anglo-Persian for the source of the oil will be discussed. The role of Winston Churchill in the eventual outcome will be presented. Finally, we will discuss the role and impact of oil as well as technological innovations on the execution of World War I. The emergence of oil as a strategic, national, and commercial interest in the political theatre after the war will become evident.

Major Lesson Themes

  • Clash of Cultures, British vs. Persian
  • Strategic positioning, Russia vs. Britain
  • Interaction between commercial interests and nationalistic concerns
  • British needed to catch up with the German & American navies
  • Benefits of oil conversion in the navy
  • Strategic access to oil
  • Interplay between strategic, national, & commercial interests in the political theatre
  • Transformative impacts of internal combustion engine
  • Emergence of technology in waging war
  • Access & control of oil was critical to survival & decisive in World War I
  • Oil prices can rise very quickly-inelastic demand; Industry supply has long lead times
  • European Nations wanted influence over Mesopotamia area (present-day Iraq)
  • War illustrated oil = power
  • The roaring 1920s, rising tide of gasoline

Learning Outcomes for Lesson 3:

Students should be able to do the following after completing Lesson 3:

  • identify the founder(s) of Middle East oil industry;
  • explain why both Britain and Russia sought domination over Persia;
  • identify the feuding local factions in Persia and the challenges of William D’Arcy & the evolution of Anglo-Persian Oil Company;
  • explain George Reynolds’ challenges in Persia and his tensions with Burmah Oil;
  • explain the advantages of conversion from coal to oil in the military theatre;
  • explain the “Guns vs. butter” debate, the “Shell Menace,” and Churchill’s role;
  • show the interplay between strategic, national, and commercial interests with the British Government and Anglo-Persian Oil Company agreement;
  • illustrate how oil became a strategic commodity and an instrument of national policy;
  • articulate the impact of the internal combustion engine, oil, and innovation on WWI;
  • explain how the “Taxi Armada” saved Paris, the city of lights;
  • give the roles of Marcus Samuel and Anglo-Persian in WWI;
  • discuss the devastating effects of the German U-Boats and how they were overcome;
  • explain how and why oil shortage is attributed to the end and outcome of the war;
  • explain the trends in crude prices from 1900-1920 and the inelastic demand during WWI;
  • provide some of the lasting lessons on WWI;
  • account for how the Turkish Petroleum Company evolved over time;
  • describe Calouste Gulbenkian and compare him to Walter Teagle;
  • explain the differing relationships over time between the American government and the oil companies;
  • justify why Britain did not welcome but later welcomed American presence in the Middle East;
  • explain the Red Line Agreement.

What is due for Lesson 3?

This lesson will take us one week to complete. Please refer to the Course Syllabus for specific time frames and due dates. Specific directions for the assignment below can be found within this lesson.

Lesson 3 Checklist
Activity Location Submitting Your Work
Read The Prize: Chapters 7, 8, 9, & 10 (select sections) No Submission
Read The Quest: Chapters 2 & 13 (select sections) No Submission
Read Online Lesson 3: Asian Oil Development and World War I No Submission
Complete Term Project Proposal Canvas
Complete Lesson 3 Participation Activity Canvas
Take Lesson 3 Quiz Canvas

Questions?

If you have any questions, please post them to our Questions? discussion forum (not email), located in Canvas. The TA and I will check that discussion forum daily to respond. While you are there, feel free to post your own responses if you, too, are able to help a classmate.