** World War II -- oil economics raw materials Britain British








British World War II Economics: Raw Materials--Oil


Figure 1.--Britain and the Dominions would get most of their oil and petroleum products from the United States during World War II. The United States produced nearly 60 percent of the crude and refined oil products produced world wide (1939). At the time Britain was getting most of its oil from the Caribbean, Mexico and Venezuela (mostly American companies). This changed dramaticlly as the War progressed and American oil production increased. Source: Andrew Warinner

Britain likes to think of itself as fighting on against the NAZIs alone after the fall of France (June 1940). This was never the case, The Empire and Dominions played major roles before the Soviet Union and American enteed the War and forged the Grand Alliance against NAZIism. While America did not immediately enter the War, President Roosevelt was determined to assist Britain. Large quantities of supplies were delivered Britain, eventually when Britain essentially went bankrupy as part of Lend Lease. The supplies included copious quantities of oil. Britin like Germany had virtually no domestic production of oil. It was virtually all imported. Oil had become important during World War I and British companies developed fields in the Empire and associated countries, primarily Iran and Iraq. The problem for Britain was all these fields were located at considerable distance from Britain itself. Not only did the oil have to be delivered thriugh U-boat infested waters, but as the Meditewrrabnean was closed by the Axis (1940-42), but delivering Middle Eastern oil around the Caope of Good Hope would hac=ve required an enormousd tasnker fleet that Britain did not have. The absweer of course was American oil. During the War, however, most of the oil delivered to Britain came from America and American associated companies in Venezuela. Britain has sources of oil in the Empire are closely connected states like Iraq. Getting it to Britain aftr the outbrek of the War, especially after Italy entered the War, was a logistical nightmre, requirung long voyages over U-boat infested waters. The North Atlantic run in contast wasaelatively short distance. As long as the Royal Navy could keep the vital North Atlantic sealanes open, the Germans could not knock Britain out of the War. When the Germans failed to invade Britain or to force Britain to accept a negotiated peace after the fall of France, Hitler was left with an rmed citadel to become avast air craft carrier on the western border of his new empire. Despite the disaster in France, the Blitz, and the U-boat campaign, American oil deliveries kept Britain well supplied with oil throughout the War. And the 8th Army in the Western Desert as well as the Royal Navy squadron based in Alxandria was well supplied with oil from Iraqi fields. Interestingly, the D'Arcy Exploration company, a subsidiary of the Anglo-Iranian Oil Company (now BP), has discovered oil in the middle of Britain (1939). It was located in of all palces Sherwood Forest, near Eakring. Shallow ealls were developed. Given the War emergency, not durther stepos were taken because modern technology and equipment was needed. Finally Oklahoma Roughnecks and the needed equipment was brought in (1943). The effort was called the English Project. Using innovative methods and advanced equopment, the Americans drilled an average of one well per week in Dukes Wood, while the British took at least 5 weeks per well. The field began producing small qiantities. The American oilmen were credited with 94 completions and 76 producing oil wells (January 1944). The English Project contract was completed (March 1944). The Americans drilled 106 wells with 94 producers. Britain's oil production increased from 300 barrels of oil a day to more than 3,000 barrels of oil a day. Small in overall World War terms, but certainly part of the oil story. [AOGHS]

World War I

The Royal Navy and U.S. Navy begam the transition from coal to oil before World War I. Oil could be more easukydstired and produced less smoke. Smoke from coal ngenberating power meant thst appriching shiops could be lov=cted a huge dustance. Unlike America, Britain had, no domestic sources of oil. As a result, the Brutish Governent bergaan supporting effort to develop overseas sources, most promenbtly Middle Eastern sources. While some oil was obtiuned in Iran, the major supplier during World War I would be the United States, along with American companies in Mexico. The inintial oil supplies were for the Royal Navy surface fleet, but as the War progressed, oil would be needed for submarines, aircraft, tanks and trucks.

Synthetic Oil

The British government with the rise of the NAZIs in Germny, became concerned sbout not having a domestic source of oil. They studied the possibility of reducing reliance on imported oil by using Britain's huge coal resource as raw material for synthetic oil. It ultimately rejected the idea along with the substsantial investment required. Synthetic oil was much more expensive than imported oil. The Government concluded that British oversaes oil production (Midfdkes East, India, and Borneo) along with American was suffiucent nbd tghe Fioyal Nsvy could guarntee delivery. The Government decided that oil tankers could be protectedewith convoys, but synthetic oil plants could not be protected from boming attackd.

Technology


Refining


Transport

Oil had become important during World War I and British companies developed fields in the Empire and associated countries, primarily Iran and Iraq. The problem for Britain was all these fields were located at considerable distance from Britain itself. Getting it to Britain after the outbrek of the War, especially after Italy entered the War, was a logistical nightmre. Not only did the oil have to be delivered thriugh U-boat infested waters, but as the Meditewrrabnean was closed by the Axis (1940-42), delivering Middle Eastern oil around the Cape of Good Hope would have required an enormousd tasnker fleet that Britain did not have. Important for British forces in the Middkle East was a pipeline fron Iraq to the Mediterranean port of Jaffa in Palestine. The North Atlantic run in contast was a relatively short distance. As long as the Royal Navy could keep the vital North Atlantic sealanes open, the Germans could not knock Britain out of the War. This was part of the reason that the Battle of the Atlantic was so important. The American Libery Ship tankers were more than sufficent to get oil across the Atlantic. Even SAmericsa could not hasve produced enough tsankers to bget the needed oil around the Cape of Good Hope. Thev longer distances rewquired far more tankers to deliver.

Oil Fields

Britain likes to think of itself as fighting on against the NAZIs alone after the fall of France (June 1940). This was never the case, The Empire and Dominions played major roles before the Soviet Union and American enteed the War and forged the Grand Alliance against NAZIism. While America did not immediately enter the War, President Roosevelt was determined to assist Britain. The Bfritish did ptroduce oil during the War, primsrily from Middle East (Iran and Iraq). And they were important for Brirish Middle Eastern and Asian operations. The central oil fact, however, is that American oil would amounted to 6 billion barrels, out of a total of 7 billion barrels consumed by the Allies during the War. [Miller]

America

The Roosevelt Administration understood from an early point that America would eventually be involved in World War II, althogh the Presidebt hoped that Briotain and France could contin NAZI Germsny. As part of American preparations, the Aministration enlisted the aid of American oil companies, which were massive producers of crude oil and refined products. The companies respomded enthusiasticlly. American oil would amounted to 6 billion barrels, out of a total of 7 billion barrels consumed by the Allies during the War. [Miller] The United States would produce about three quaters of all the oil produced in World War II, including British Empire, Axis, and Soviet production. Substantial quantities of that enormous American output was provided to Allied countries. Here the major foreign recipient was Britain. Britain had many oil fields scsttered in ther Middle East, India, and Far East. While there was a large number of fields, they produced relstive small quantities compared to America. Brirish prioduction was in the millions of brrels, SAmericsn production was in the billions of bsarrels. Large quantities of American was delivered to Britaincfrom the beginning iof the War and eventually when Britain essentially went bankrupy as part of Lend Lease. The supplies included copious quantities of oil. Britin like Germany had virtually no domestic production of oil. It was virtually all imported. The answer to Britain's oil needs of course was American oil. During the War most of the oil delivered to Britain came from America and American associated companies in Venezuela.. When the Germans failed to invade Britain or to force Britain to accept a negotiated peace after the fall of France, Hitler was left with an rmed citadel to become avast air craft carrier on the western border of his new empire. Despite the disaster in France, the Blitz, and the U-boat campaign, American oil deliveries kept Britain well supplied with oil throughout the War. And the 8th Army in the Western Desert as well as the Royal Navy squadron based in Alxandria was well supplied with oil from Iraqi fields.

Borneo

Bornero is a large island off Malaya. At the time of World War II, it was divided into Dutch and Bitish sdectors. ,British oil fiekds in Borneo were lost after Pearl Harbor and the Japanese seizure of Borneo as well as

Burma

British oil fiekds in Burma were lost after Pearl Harbor and the Japanese seizure of Burma (1942).

Britain (Domestic)

BP (at the time Anglo American) and Shell played an important role in supplying oil for the British war effort. Before the War as a result of the Depression and falling prices, Anglo-Persian (now BP) and Royal Dutch-Shell (a British-Duych joint venture) agree to combine their British marketing operations, to be known as Shell-Mex and BP. This arrangement continued until 1976. Britain at the time had no significant domestic oil production or sizeable oil stockpiles. Unfortunarely for Brtitain, their diekld were located at considerable distance to the Btitish Isles. Interestingly, the D'Arcy Exploration company, a subsidiary of the Anglo-Iranian Oil Company (now BP), has discovered oil in the middle of Britain (1939). It was located in of all palces Sherwood Forest, near Eakring. Shallow walls were developed. Given the War emergency, not durther stepos were taken because modern technology and equipment was needed. Finally Oklahoma Roughnecks and the needed equipment was brought in (1943). The effort was called the English Project. Using innovative methods and advanced equopment, the Americans drilled an average of one well per week in Dukes Wood, while the British took at least 5 weeks per well. The field began producing small qiantities. The American oilmen were credited with 94 completions and 76 producing oil wells (January 1944). The English Project contract was completed (March 1944). The Americans drilled 106 wells with 94 producers. Britain's oil production increased from 300 barrels of oil a day to more than 3,000 barrels of oil a day. Small in overall World War terms, but certainly part of the oil story. [AOGHS]

India


Iraq

The Iraqi Government granted a concession covering most of Iraq to the Turkish Petroleum Company (TPC), in which Anglo-Persian (Now BP) held a 47.5 percent interest (1925). Soon after, oil is discovered in Iraq. This discovery would become the immense Kirkuk field, centeed on Baba Gurgur. Anglo-Persian’s holding in the TPC is halved to open the concession to a consortium of American companies. The 'As-Is' agreement, under which world oil output is fixed to the major producers’ current levels, is signed (1928). Two pipelines, running from Kirkuk in Iraq to Tripoli in Lebanon and Haifa in Palestine, totalling 1,152 miles were completed (1934). To process the oil, a refinery is built in Haifa which opened just before the outbreak of World War II.

Iran/Persia

A wealthy British speculator, William D'Arcy, obtined a concession from the Persian Goivernment to explore and develop southern Iran's oil resources (1901). The exploration in Iran was led by George Reynolds. D-Arcy exausted much of his firtune looking fior oil. Oil was discoivered (1908). As a result, the London-based d Anglo-Persian Oil Company (APOC) was founded when the Burmah Oil created APOC as a subsidiary and sold shares to the public.[7](1909). Michael Gasson (Former Group Archivist, BP Archive). "Home: The BP Archive" This was the beginning of BP. The Royal Navy at the time was tranbsitioning from coal to oil and need a source of oil other than America. The APOC built an oil refinery on Abadan Island near the coast of the Persian Gulf. This is in southwestern Iran near Basara and the Iraqi border. The refinery was was completed in 1912 as a pipeline terminus, and was one of the world's largest oil refineries at the time. Volume production of Persian oil products began soon after (1913). For its first 50 years, the Abadan oil refinery was the largest in the world. The British Government in the run up to Workd War I purchased a majority of the company's shares). This gave the British direct control of the Iranian oil industry (1914) which it would retain until after World War II. Oil exports from Abadan rose to 4.5 million tons/ 28.3 million barrels (1927). Anglo-Persian signed a new, 60-year concession with Persia, reducing the area to 100,000 sq miles - still a vast area (1933). Under the terms of the agreement, AIOC paid a flat payment to Iran of 4 British pounds for every ton of crude oil exported. Iran had no control over the oil exports. [Kurtis and Hooglund, pp. 160–63.] The Shah of Persia Reza Shah for both nationalist and racial reasonds decided to changre the nane of the country to Iran (1935). Anglo-Persian as a result is renamed the Anglo-Iranian Oil Company (AIOC). Crude production rose to 209,000 barrels a day (1937). That would nean 76 million barrels a year. Teza Shah's pro Grman inclinations put British access to Iranian oil in danger, as well as a Lend Lease pipeline to the Soviet Union. Production declined to 135,000 barrels a day (1941). Britain and the Soviets intervened in Iran as apart of a joint operration (1942). Food shortages and disease outbreaks were dealt with as part of ASnbgko-American effort to guarantee Lend Lerase ship,ents tgo the Soviets. Crude production reached 345,000 barrels a day/ 126 million barrels (1945). Importantly, high octanr aviastion fuel began. One report indicated a production of 20,000 barrels, but we are unsure about the date.

Mexico


Venezuela


Sources

American Oil & Gas Historical Society (AOGHS), "Roughnecks of Sherwood Forest," AOGHS Website (November 28, 2012).

Gasson, Michael. "Home: The BP Archive".

Kurtis, Glenn and Eric Hooglund. Iran: A Country Study (Washington D.C.: Library of Congress).

Miller, Keith. "How important was oil in World War II," History News Network Colombian College of Arts & Sciences/George Washington University (2001).

Warinner, Andrew. "Britain ngot its oil and petroleum from the Unites States," Quora anaswer (Mayn 30, 2012).






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Created: 6:06 PM 3/25/2021
Last updated: 6:06 PM 3/25/2021