Empires of Energy

Abstract

This dissertation examines British oil policy from the aftermath of the Suez Crisis in 1956-1957 until the Iranian Revolution and the electoral victory of Margaret Thatcher's Conservative Party in 1979. It was a period marked by major transitions within Britain's oil policy as well as broader changes within the international oil market. It argues that the story of Britain, and Britain's two domestically-based oil companies, BP and Shell, offers a valuable case study in the development of competing ideas about the reorganization of the international oil industry in the wake of the rise of the Organization of Petroleum Exporting countries and the companies' losing control over the production of oil. The emergence of OPEC, and the political and resource nationalism which provided it with its inspiration, proved to be a challenge for the companies. In their view, this had to be countered commercially through the maintenance of the role of the major oil companies as well as the further internationalization of the oil market; a process which they believed would help de-politicize oil production and distribution. Although the Governments which ruled Britain in this era were initially in favor of this laissez-faire approach, economic and political uncertainty in Britain, coupled with the game-changing potential of Britain's own North Sea oil resources led to a gradual process of state intervention into oil matters, both at home and abroad. Out of this emerged a different philosophy on the part of Cabinet and Whitehall officials, one which saw the future of oil being in the hands of the state and state-controlled companies. This growing divergence weakened the traditional partnership between BP, Shell and the British Government and limited cooperation until the defeat of the Labour Party in 1979 by Thatcher's Conservatives reversed the trend of growing state involvement. Together these inter-connected accounts provide an important counter-point to the idea that the emergence of a fully international oil market was inevitable and reveals that the reformation of the oil market in the post-1973 world was the result of political and as well as market forces.