Connecting Midstream: The Politics and Economics of Oil Transportation in the Middle East

Abstract

This dissertation examines the political and economic significance of oil transportation in the Middle East. It argues that the June 1967 War and the closure of the Suez Canal from 1967 to 1975 transformed the patterns of oil transportation in the Middle East and shaped the history of oil and Middle East politics in the process. Prior to 1967, Western oil companies and governments used the Suez Canal and transnational pipelines from Iraq and Saudi Arabia to transport oil to Europe across oil-transit countries in the eastern Mediterranean, including Egypt, Jordan, Lebanon, and Syria. During the Suez Crisis from 1956 to 1957, oil supplies were briefly curtailed and alternative oil routes considered, but Western strategies for transporting Persian Gulf oil to Europe did not change.

The closure of the Suez Canal in 1967, however, led Western oil companies to prefer the security and flexibility of utilizing supertankers to transport Persian Gulf oil around Africa to northwestern Europe. Since Persian Gulf oil no longer passed through the Mediterranean, oil-producing countries (Algeria, Iraq, Libya, and the Soviet Union), oil-transit countries (Egypt, Israel, Lebanon, Syria, and Turkey), and oil-consuming countries (France, Italy, Spain, and West Germany) developed economic interdependence based on their common interest in transporting oil from and through the Mediterranean. The October 1973 War and high price of oil after the OAPEC embargo from 1973 to 1974 accelerated interstate cooperation in transporting oil from and through the Mediterranean. Iraq and Turkey agreed to build an oil pipeline from Kirkuk in northern Iraq to Ceyhan on the Turkish Mediterranean coast, which was completed in 1977. The high price of oil also encouraged producers and consumers of Persian Gulf oil to seek more direct oil routes through the Mediterranean, as oil-powered supertankers were less economic. Egypt and Israel forged peace, which permitted oil to flow through the Suez Canal, which reopened in 1975; a new pipeline in Egypt built in 1977; and the Eilat-Ashkelon Pipeline in Israel, which had been completed in 1970. The new oil routes provided diversification, cost savings, and security to the flow of oil from the Middle East.