Statecraft & Proxy War: Catalysts For Higher Resource Prices

Nov. 01, 2012 11:40 AM ETIXC, IOIL, AXEN, IPW-OLD, GNAT, FILL, OIL-OLD, DBO, USO, USL, IEO, IEZ, IYE, PXE, PXI, XES, XLE, XOP, VDE, RYE, FXN, OIH, PXJ, PSCE, OGEM, EMEY6 Comments
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Synchronicity. Carl Jung wrote about it. The Police sang about it. The Anglo-American geo-strategic interests live it: past, present, and future.

Following WWI in April 1920, the Allied Supreme Council met in San Remo, Italy to decide how the petroleum resources of the Middle East would be carved up. Interestingly, this meeting occurred without American involvement, and the agreement ceded 25% of all petroleum extracted in Mesopotamia (Iraq) to France. This interest had been the Deutsche Bank share of the Turkish Petroleum Gesellschaft acquired in the Versailles Treaty. The remaining 75% would fall to the British government controlled Anglo-Persian & Royal Dutch Shell companies. Under this agreement, France granted British oil companies the right to run an oil pipeline through French Syria including tax exemption.

In March 1921, Winston Churchill (as Sec. of State of Colonial Affairs), held a meeting in Cairo of top British experts on the Middle East/Near East. Out of this meeting, Mesopotamia was renamed Iraq, power over Iraq was granted to Faisal bin Hussein of the Hashemite dynasty, and British RAF planes were based there permanently. These developments caused consternation amongst US oil interests (including Rockefeller's Standard Oil and US State Department) and fomented an intense struggle between British and American petroleum interests throughout the 1920s.

Recent events, especially between Turkey and Syria, illustrate the recurring historical patterns of statecraft and proxy war as means to both control and restrict access to energy resources. While Turkey's allegiance was solicited in recent years by both the US and Russia, recent developments suggest that the US and Western interests were more persuasive. The following actions confirm this reality: 1. recent airspace restrictions by Turkey of civilian air traffic between Russia and Syria, 2. Turkish hosting of Syrian opposition and facilitating supplies to the FSA (Free Syrian Army).

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Historical Data Mining & Visualization for NYMEX energy markets. Our experience derives from the proprietary trading world involved in US Index derivatives, commodity ETF derivatives, and exchange-traded NYMEX WTI derivatives.Futures trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

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