Post-1945, there emerged an international oil establishment named the postwar petroleum order. Before 1939, the output of petroleum in the Middle Eastern countries was not high and the region contributed only a marginal share to the world petroleum production. Before the postwar years, British Petroleum (BP) was the dominant player in the petroleum market however, after the war, five American companies broke BP’s monopoly. This postwar order was characterized by a corporate consolidation of the major oil companies in the Middle East. The primary aim of the order was to maximize the production of petroleum in the Persian Gulf and supply the increased postwar energy requirement of the Europe (Citino 137).
By 1948, United States had become one of the major importers of petroleum from the Middle Eastern countries. The era of Cold War diplomacy saw a rise in the energy requirement of the country, which made the rich oil resources of the Gulf indispensable to the endeavor (Painter "Oil, Resources, and the Cold War" 489). The oil from the gulf was important as this provided a cheap source to help reconstructing the damage World War II had done on Europe. Further, defending the tattered Europe after the war was essential to guarantee development in the US. The postwar petroleum order consisted of a tangible infrastructure resource to deliver oil to the European countries. The only infrastructure that supported the petroleum order then was the Suez Canal, and two other pipelines in the Middle East (Citino 137).
The political volatility of the Middle East in the postwar years only created greater problems for the petroleum order. Further, the creation of Israel in 1948 only added to the problems of the order as the Arab League members were skeptical of the Jewish nation and created a state embargo on supplying petroleum to the Western countries. Thus, the postwar petroleum order,
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