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MYTHS, LIES AND OIL WARS
F. William Engdahl

edition.engdahl Wiesbaden
Copyright © 2012 by F. William Engdahl

The rights of F. William Engdahl to be identified as the author of this work has
been asserted by him in accordance with the Copyright Laws of the United
States of America and the UK Copyright, Designs and Patents Act 1988. No part
of this book may be reproduced or transmitted in any form or by means,
electronic, mechanical, photocopying, recording or otherwise without prior
written permission of the publisher and author.

Library of Congress cataloging in Publication Data applied for

Edited by Margot L. White

Cover design:
Kay Coenen, Infographicmedia.Nl + 06 421 46 0 46 +
+ http://www.infographicmedia.com +

Published by edition.engdahl Wiesbaden, Germany

www.williamengdahl.com

ISBN 978-3-9813263-6-9 Printed in USA

To George L. Mehren— invaluable friend, honest critic and intellectual architect

of the concept behind this book and to Vladimir Kutcherov, friend and teacher
whose passion for scientific truth guided me in this writing.

CONTENTS

A UTHOR’S INTRODUCTION ................................................................. 1

From Spice Wars to Oil Wars .............................................................................. 1
Oil wars and politics ............................................................................................ 3

1. A CATASTROPHIC BLUNDER REPEATED ....................................... 7

Painful lessons ..................................................................................................... 7
A small oversight ................................................................................................. 8
Secret War for the Baghdad Railway ..................................................................
10
Stealing Mesopotamia for the Empire ................................................................
11
A little war for rich booty .................................................................................. 13
Grabbing Iraq by ruse........................................................................................ 15
World War II: Catastrophic Blunder Repeated .................................................. 17
Wehrmacht out of gas ....................................................................................... 20

2. A GLOBAL POWER SHIFT ............................................................ 25

A new oil imperialism ........................................................................................ 25
Running Trolley Cars into the Ground ............................................................. 26
The trains next... ............................................................................................... 28

3. S ILENT WEAPONS FOR QUIET WARS .......................................... 33

The new kings of oil .......................................................................................... 33
A fateful Harvard project ................................................................................... 34
Keeping oil prices high ...................................................................................... 36
Big Oil finds a new King ................................................................................... 38
Hubbert’s Malthusian energy model .................................................................. 42
Big oil uses Hubbert .......................................................................................... 44
Seven Powerful Sisters .......................................................................................
45

4. A DRAMATIC SHOCK ................................................................... 51

A US economy in eclipse.................................................................................... 51
Preparing a dramatic shock ................................................................................ 53
Elites meet in Sweden ........................................................................................ 53
A Dutch Hotel and Atlanticist schemes ..............................................................
57
Kissinger’s Oil Shock .........................................................................................
58
Germany was a target, not an ally .......................................................................
60
An almost perfect crime ..................................................................................... 61
Kissinger’s Alchemy – oil becomes the new gold .................................................
64
Hubbert’s Day in the Sun .................................................................................. 66
5. A MALTHUSIAN ENERGY STRATEGY ........................................... 71
Rockefeller’s paradigm shift ................................................................................
71
Creating the new paradigm ................................................................................ 72
‘Limits to Growth’ ............................................................................................. 73
The real enemy: Humanity ................................................................................ 76
Paradigm Shift via NGOs .................................................................................. 78
A mysterious Canadian insider ...........................................................................
81
‘Silent weapons for Quiet wars’ ..........................................................................
83

6. A HOSTAGE TO CHASE MANHATTAN ......................................... 89

Hiding an oil glut .............................................................................................. 89
Losing the oil lever .............................................................................................
90
A Trilateral initiative .......................................................................................... 92
A predictable energy strategy ..............................................................................
93
Rockefeller loses, then uses an old buddy ...........................................................
95

7. O IL WARS BY PROXY ................................................................. 103

A very bloody OPEC oil war............................................................................ 103
Saddam, Kissinger and the BNL .......................................................................
107
CIA ties to Saddam .......................................................................................... 109
October Surprises ............................................................................................. 111
Washington’s ‘reverse’ oil shock .......................................................................
114
Bringing the Soviets to their knees ...................................................................
116

8. C ONTROLLING ALL OIL, EVERYWHERE ................................... 123

Luring Saddam into a Honey Trap...again ........................................................123
Getting Kuwait on board ..................................................................................124
April’s fateful chat with Saddam
.......................................................................127
9. G RABBING SOVIET OIL RESOURCES ......................................... 135
Control of oil, everywhere... .............................................................................135
Washington targets Russia ................................................................................136
Grabbing the oil treasure ..................................................................................138
Chechen oil wars ..............................................................................................140
Washington’s alternative pipeline .....................................................................142
Washington’s proxy wars
..................................................................................143
1994 A Turning Point......................................................................................145

10. A NEW RUSSIAN REVOLUTION .................................................. 149

A Russian revolution in petroleum science
........................................................149
Deep oil origins ................................................................................................153
Oil ‘in all the wrong places’ ..............................................................................154
Russian geophysics comes to
Vietnam...............................................................155
Stalin’s Mandate – self-sufficiency in oil
...........................................................156
Oil Fields that refill? .........................................................................................159

11. B IG OIL COUNTERATTACKS—HUBBERT’S PEAK REVIVED ....... 167

An unscientific Scientific American
..................................................................167
Cheney echoes Hubbert’s friends
......................................................................169
Washington’s ‘clash of civilizations’
..................................................................170
Cheney’s Energy Task Force
.............................................................................172
Cheney’s Peak Oil Friend .................................................................................173
‘Twilight’ in the Saudi Desert?..........................................................................175
The Saudi surprise ............................................................................................178

12. R USSIA AND CHENEY’S OIL WARS ............................................. 183

Going ‘where the oil is’ ....................................................................................
183
Iraq and the China danger ............................................................................... 183
‘It was about oil...’............................................................................................ 184
War on Terror or War on Oil?......................................................................... 186
The new energy wars ........................................................................................
187
Brzezinski’s pipeline .........................................................................................
188
Washington’s Rose Revolution .........................................................................
189
Tbilisi to Kiev: Ukraine’s Orange Revolution ...................................................
190

13. C HINA BECOMES THE NEW TARGET ........................................ 195

Emerging rival China ....................................................................................... 195
Beijing’s 9/11 shock .........................................................................................
196
Beijing moves to secure its energy .....................................................................
199
Wooing Africa ................................................................................................. 201
Darfur: ‘It’s about oil, Stupid’ ..........................................................................
203
AFRICOM ...................................................................................................... 204

14. W ASHINGTON’S GREATER MIDDLE EAST WAR ........................ 209

A Prairie Fire Begins in Tunisia ........................................................................
209
Washington’s Greater Middle East Project .......................................................
211
Project for a ‘Greater Middle East’ ...................................................................
213
Washington’s ‘soft’ revolutions.........................................................................
215
Kefaya—Pentagon ‘non-violent warfare’ ..........................................................
216
RAND and Kefaya ........................................................................................... 217
Libya: A NATO war is necessary ......................................................................
219
The strategic goal ............................................................................................. 222

APPENDIX ....................................................................................... 227 Select

Scientifric Papers on Oil Origins and Reserves ....................................... 227
We have about 50% of the world's wealth but only 6.3% of its population. This
disparity is particularly great as between ourselves and the peoples of Asia. In
this situation, we cannot fail to be the object of envy and resentment. Our real
task in the coming period is to devise a pattern of relationships which will permit
us to maintain this position of disparity without positive detriment to our
national security. To do so, we will have to dispense with all sentimentality and
day-dreaming; and our attention will have to be concentrated everywhere on our
immediate national objectives. We need not deceive ourselves that we can afford
today the luxury of altruism and worldbenefaction…

We should dispense with the aspiration to "be liked" or to be regarded as the

repository of a high-minded international altruism. We should stop putting
ourselves in the position of being our brothers' keeper and refrain from offering
moral and ideological advice. We should cease to talk about vague and…unreal
objectives such as human rights, the raising of the living standards, and
democratization. The day is not far off when we are going to have to deal in
straight power concepts. The less we are then hampered by idealistic slogans, the
better.

George F. Kennan, US State Department, Policy Planning Study 23 (PPS23),

Foreign Relations of the United States (FRUS), 1948

AUTHOR’S INTRODUCTION

From Spice Wars to Oil Wars

In the words of George Santayana, “Those who cannot remember the past are
condemned to repeat it.” The history of the last century is unique in significant
respects, but in terms of manifesting fundamental features of human behavior
and actions, it is anything but unique.

In September 2001 after the destruction of the World Trade Center towers and
the attack on the Pentagon, President George W. Bush declared a US War on
Terrorism, calling it a “new crusade,” a war of good versus evil: “You’re either
with us or against us.” His choice of words was revealing as it evoked for the
rest of the world — especially the nations of the oil-rich, predominantly Arab
Middle East – more than two centuries of European “Holy Crusades” against the
Muslim peoples of the Middle East. The historical comparison by Bush was
revealing, so much so that Bush was quickly advised to drop the word ‘crusade’
from his rhetoric.
from his rhetoric.

Almost eight centuries before the dramatic events of September 2001, the
Arab/North African world had been at the center of world geopolitical conflict.
Arab traders across North Africa and what is today called by the West the
‘Middle East’ had secured a tightly-controlled monopoly on the most valuable
commodity of that day — the spices from Asia.

The clever Arab tradesmen kept the origins of their spices—cinnamon, pepper,
nutmeg and other spices—a de facto military secret of the highest strategic
importance. They went to extraordinary lengths to perpetuate a myth of great
scarcity in order to maintain monopoly control of the remote sources of the
much desired spices and, thereby, to attain colossal profit margins of as much as
4000% on their trade.

Venice, then a City State on the Adriatic Sea, had close ties to the Orient. As a
result of its trade ties to Arab spice merchants, as well, Venice rose to a position
of unprecedented wealth and power in the 13th Century. Venice became the
mightiest naval empire of Europe based on dominating and controlling the
European import of oriental spices traded by the Arabs.

When Venice was threatened by an Arab cutoff of those spices, the City State
launched one of history’s most brutal and grandiose looting operations — the
religious crusade of 1204, a naked imperial conquest masquerading as a Holy
War.

The Arabs had successfully controlled the supplies of exotic spices from
Indonesia and India, the world’s most treasured commodities, by inventing
mythical tales of their extraordinarily remote sources, as well as of their extreme
scarcity. For the Europeans, the Arab traders invented fabulous tales of the
extreme dangers involved in securing the allegedly ‘rare’ and ‘scarce’ spices.
And they used military means to defend their secret sources from European
traders – that is, until a suspicious Venice discovered the sources and set about
to capture the riches for herself. Thus opened a black chapter in history known
as the Holy Crusades of the Tenth and Eleventh Centuries. Those religious wars
were, in reality, spice wars.

Venice recruited mercenary armies from France and elsewhere, promising them
a share of the conquered loot – albeit a minor share. Venice made certain it took
the lion’s share of the loot. Carrying the Sword and Cross, financed and
provided with countless ships by Venice, the crusader armies launched what
provided with countless ships by Venice, the crusader armies launched what
became almost two centuries of wars and slaughter — Christianity’s own
version of Jihad.

The ‘Spice Wars’ were dressed up in religious robes and disguised as Holy Wars
of Christians against Islamic ‘infidels.’ In reality they were wars of conquest and
control over the world’s most valuable commodities of the day—the spices of
the Orient. Tens of thousands of ‘soldiers of Christ’ recruited for a Holy War
often found themselves diverted from the alleged goal of recapturing the Holy
Lands from the Muslim infidels, and instead sent to grab more worldly treasures
for their Venetian sponsors.

The greatest Crusade, begun in 1204, did not even target Arab lands, but rather
the then-Christian city of Constantinople (now Istanbul), the metropolis at the
crossroads of east-west trade in spices. The Crusaders sacked and occupied
Constantinople, the fabulously wealthy Capitol of the Eastern Christian
Byzantine Empire. It was the time of the Great Schism within Christendom
between the Eastern Orthodox and Western Latin churches. Marching with the
Cross, the Venetian Crusaders’ swords would cut down the Orthodox Christians
as readily as the Muslim ‘infidels.’

Oil wars and politics

In the 1890s a German engineer named Rudolf Diesel transformed world politics
and the world economy by inventing an internal combustion engine that was up
to 500% more efficient than traditional coal-powered steam engines used in
naval ships. Within two decades, the petroleum-fueled motorization of the
world’s major navies and armies had begun the most profound transformation of
world power since the invention of the steam engine two centuries earlier.

As with the bloody history of the highly valued spices of the Orient centuries
before, the history of oil would be written in blood, fought over in wars, cloaked
in deception and permeated by desperate attempts to hide the secrets of its
origins.

To secure an apparent monopoly on world oil and with it, the greatest
concentration of political power the world had ever seen, a tiny group of
companies—British and American—backed secretly by their respective
governments, created one of the greatest myths of modern science. They
invented myths: 1) that oil was a scarce and rapidly depleting energy resource;
2) that it had been somehow created from transformed biological detritus several
2) that it had been somehow created from transformed biological detritus several
hundred million years ago; 3) in a process described in western geology
textbooks — if at all — only vaguely, but as if it were infallible, scientific fact.

Since the dawn of the so-called ‘Age of Petroleum’ more than a century ago, the
world has largely believed the carefully cultivated myth of oil scarcity, as well as
the unscientific claim that oil originated from fossilized remains of dinosaurs
and plants.

The following volume traces the origin of that scarcity myth and its role in two
great and destructive world wars, as well as endless international conflicts —
from the Cold War to regional wars in Africa, the Middle East, and beyond — in
order to maintain oil supremacy and, above all, to control oil flows and the
dollars tied to them. That control was firmly monopolized by a handful of
American and British oil giants—once called the seven sisters, today just four in
number—ExxonMobil, Chevron, BP and Shell.

The large-scale advent of new financial instruments — called “oil derivatives”

or “futures” — by the late 1980s enabled yet another means of Anglo-American
control of oil. It created the mechanism for controlling the price of the world’s
most valuable commodity at key periods without regard to the traditional laws of
supply and demand. That opened huge new potentials to use oil as a weapon of
economic warfare.

The following book traces the history of that Petroleum Century and of the
extraordinary and often shocking measures used by an identifiable Anglo-
American elite to maintain the myth of oil scarcity as an essential pillar of their
global power. It also documents in detail the new version of the ‘scarcity’
mythology — a myth today enshrined in an almost religious ideology often
called “Peak Oil” theory.

The book also details the emergence of a substantiated new theory of petroleum
origins deep in the mantle of the Earth where conventional petroleum geology
insists the presence of oil is not possible. The new science of petroleum —
whose traditional doctrines trace back to the darkest days of the US-Soviet Cold
War — holds out the potential to make petroleum as abundant and affordable
today as the supposedly scarce spices such as pepper became, once their secrets
were uncovered.

When George W. Bush launched his new “crusade” against what was clearly a
predominantly Islamic world — the oil-rich Middle East and Eurasia — the
predominantly Islamic world — the oil-rich Middle East and Eurasia — the
parallel to the Holy Crusades some eight hundred years earlier was more
revealing than most realized.

This time, a quasi-religious fervor was being stirred up to justify what in fact
were new oil wars—wars aimed at securing global control of the world’s most
valuable commodity: petroleum. Against the backdrop of endlessly repeated
televised images of the World Trade Center towers under attack, and the image
of an elusive Osama bin Laden, hapless Americans were lured into what has
become a new wave of US-backed wars from Kabul to Baghdad to Darfur to
Cairo and Tripoli and beyond — wars supposedly for “freedom and democracy.”
In reality they were for control of oil — all oil, everywhere.

On December 17, 2010 a young Tunisian named Mohamed Bouazizi set fire to
himself when officials in his impoverished rural town prevented him from
selling vegetables on the streets. The event nominally triggered a wave of riots,
protest marches and conflicts that soon swept the Islamic world from Egypt to
Yemen and across North Africa and the Middle East.

The true instigator of those events, as would become clear, was far away in
Washington. The motives behind the greatest series of regime destabilizations
since the fall of the Berlin Wall that brought down the Soviet Union had nothing
to do with genuine democracy – although cynical use was made of people’s deep
yearnings. The sweeping destabilizations had to do with power, with the future
power of an ailing American colossus, the oncehailed American Empire.

The purpose of upheavals across the Middle East — upheavals that showed no
signs of abating in early 2012 — was not to bring down the corrupt or decadent
monarchies or despotic regimes, though they certainly existed and were widely
opposed. Instead, the actual target was more than five thousand miles away from
North Africa, far from Europe and the Mediterranean, across Eurasia in Beijing.

It was becoming commonplace knowledge that China was rapidly emerging as

the world’s economic colossus. Some even spoke of China as a Superpower able
to challenge America’s hegemony one or two decades hence. For several years
— beginning with the US-financed unrest in Tibet prior to the 2008 Summer
Olympics — Washington had been running a series of ‘pin-prick’ provocations
of China, in an effort to remind Beijing of its dependence on a controlled dollar
system, to little evident effect.

It was becoming clearer to Washington and to Wall Street policy circles that
It was becoming clearer to Washington and to Wall Street policy circles that
China was exerting its self-interest around the world with increasing
effectiveness, forcefulness and self-confidence. Moreover, China was doing so
with a brilliant series of economic and diplomatic overtures across the globe to
secure the one essential commodity whose abundant supply was essential to
China’s future growth — petroleum.

Across Africa and the Middle East, Beijing’s politicians and Chinese companies
were making economic pacts with resource-rich African and Persian Gulf
countries long-since ignored or taken for granted by the West. China’s largest
suppliers of petroleum for its accelerating economic development included
Angola, Saudi Arabia, Iran, Oman, Sudan and Russia.

The outbreak of so-called “Twitter Revolutions” across the Islamic regions of

North Africa and the Middle East had begun to unleash a dramatic speculative
rise in the price of China’s most vital imported commodity—oil. More alarming
for China and numerous other nations, especially in Western Europe, was the
longer-term prospect of a Washington-orchestrated militarization of the entire
Islamic world. Indeed, the entire region was being transformed into what George
W. Bush in 2003 had dubbed a Greater Middle East – a vast area stretching from
Morocco in the west to the borders of China in the east – where the installation
of radical free market privatizations, backed by US Abrams tanks, F-16 fighter
jets and remote-controlled drones would determine the future.

As with the Spice Wars eight centuries earlier, the question of who controlled
the most essential strategic resource was what counted. In this, oil was the
highest of stakes in the geopolitical game. As Henry Kissinger, President
Nixon’s Secretary of State during the oil shocks of the early 1970s, is alleged to
have said: “If you control the oil you control entire nations.”

By the Summer of 2012 it was clear that for Washington, control of China,
Russia, Iran across the whole of Eurasia into Europe was of the highest strategic
priority. Whether she would succeed in such a high stakes game was anything
but clear.

—F. William Engdahl, Frankfurt, Germany, June 2012

chapter 1
A CATASTROPHIC BLUNDER REPEATED

Painful lessons

The German General Staff learned some painful lessons from their humiliating
defeat in World War I. Uppermost in their minds as they prepared the campaigns
that would come to be known as the Second World War was that the German
army should never again be forced to fight a war on two fronts—Russia to the
east, and France and England to the west.

That explained Germany’s effort to neutralize the threat of attack from the west
— from the Low Countries and France — in a series of dramatically successful
Blitzkrieg strikes. In September 1939 the German Panzers rolled into Poland, to
be met at Brest-Litovsk by the Red Army. On September 29, a German-Soviet
non-aggression treaty — the MolotovRibbentrop Treaty — was signed between
the foreign ministers of the USSR and the German Third Reich. That, in effect,
assured German forces a free hand in the West without fear of an imminent
strike from the Soviet Union, while the Soviets bought themselves time to
mobilize.

In May 1940, eight months after it overran Poland, the German Panzer Corps
swept across the Low Countries—Holland and Belgium—and a new word,
Blitzkrieg, entered the lexicon. German armored divisions swept across the
Meuse River at Sedan and took control of the Ardennes. Germany’s brilliant
lightning strikes led French General Maurice Gamelin to announce he could no
longer protect Paris because he had lost the Ardennes. Six weeks later France
was effectively under German control and Marshal Philippe Pétain was
proclaimed head of a proGerman Vichy Regime. British and French forces had
been driven to the sea at Dunkirk where, in one of the more curious instances of
the war, Hitler did not order their capture or defeat, permitting sufficient time for
Churchill to organize their escape by ship, enabling more than 338,000 British
and French soldiers to flee to safety in Britain. That was the true “miracle” at
Dunkirk. Hitler had evidently thought he could cut a deal with England. He was
badly mistaken.
By early 1941 German forces had successfully occupied Poland, Holland,
Belgium, France, Yugoslavia, Greece and Crete. Hitler then ordered the
Wehrmacht to prepare the most colossal military campaign in history—
Operation Barbarossa — conquest of the Soviet Union.

The German General Staff had overlooked one strategic element of ultimate
victory, however. The Third Reich was vulnerable in the most essential
commodity: oil. The oil they needed was even largely from the same oil wells of
Romania that had led to their crushing defeat in 1918.

The leading circles of the Reich — from Hitler to Goering, as well as the
Military High Command (Oberkommando der Wehrmacht or OKW), including
Chief of the General Staff of the Army Franz von Halder and General Wilhelm
Keitel, as well as the head of the Air Force — all were fixated on the Soviet
Union as Germany’s prime enemy, with Great Britain or the United States
considered less important. Germany’s ally Japan, meanwhile, with considerably
more foresight, argued that the Soviet Union was far less a strategic threat to the
Axis partners — Japan, Germany and Italy — than were their Anglo-American
opponents. Germany was to repeat the catastrophic blunder of World War I yet a
second time, as its leadership failed to fully appreciate the strategic importance
of controlling oil and of denying control of oil to the enemy.1

A small oversight

In 1916, Romania joined forces with England against Germany. In November of

that year, aware that a German assault was imminent, British military
commandoes, led by British sabotage expert Colonel John Norton-Griffiths,
along with Romanian volunteers, were sent on a secret mission to destroy oil
stocks and sabotage oil wells in Ploesti. The sabotage was successful, dealing a
devastating blow to the Germans when they took Romania in December 1916.
They had made control of Romanian oil a strategic focus of their invasion.
Romania was then Europe’s leading producer of oil.2

During the final stages of the First World War, Germany had launched a massive
western offensive in March 1918 — Ludendorff’s Operation Michael — the first
of a series of offensives designed to split British and French forces and secure a
victory before the arrival of American forces in Europe. It looked very
threatening and likely to succeed. The collapse of the Kerensky government in
Russia and the Bolsheviks’ signing of the Treaty of Brest-Litovsk on March 3,
1918 had taken Russia out of the war. Germany was able to redeploy large
numbers of troops for a final campaign in the West. Since American troops had
not yet landed in France, German chances of a military breakthrough were
significant.

Romanian oil was now essential to the German motorized offensive along the
Somme on the Western Front. Despite intensive work since 1916, however, the
German army had not been able to bring Romanian oil production to a level
needed to sustain the 1918 Spring Offensive in the Western Front. Ludendorff’s
massive offensive in the west against France and the Allied Powers, after
stunning advances, stalled at the Somme. German trucks carrying reinforcements
to advance the battle were unable to move for lack of fuel. It was the first major
battle in which motorized artillery and tanks had been used on a major scale. The
German final offensive stalled largely for lack of essential fuel for its tanks and
vehicles. It was a new mode of warfare — one in which petroleum played a vital
new role.3

For their side, French and British forces were fully supplied with American oil
from Rockefeller’s Standard Oil tankers. In December 1917, anticipating the
German offensive, French General Foch urged President Clemenceau to make an
urgent appeal to President Woodrow Wilson. Clemenceau sent a telegram to
Wilson, declaring, “A failure in the supply of petrol would cause the immediate
paralysis of our armies, and might compel us to a peace unfavorable to the
Allies…If the Allies do not wish to lose the war, then, at the moment of the great
German offensive, they must not let France lack the petrol which is as necessary
as blood in the battles of tomorrow.”4

After the defeat of Germany in 1918, Britain’s Foreign Secretary Lord Curzon
quipped, “The Allies floated to victory on a wave of oil.” 5
At the start of the Great War in August 1914, a young British Lord of the
Admiralty, Winston Churchill, had organized the conversion of the Royal Navy
from coal to the more efficient oil. The German Navy, by contrast, lacking
secure sources of oil, depended entirely on the heavier and less efficient coal to
fire its fleet. Horses were their primary mode of transport for men and war
materiel in 1914, at a ratio of one horse per three soldiers. An average horse ate
ten times the amount of food as three soldiers, making logistics difficult if not
impossible.
When Britain entered the war, it had only about 800 motor vehicles, most of
which had been requisitioned from private citizens. By the end of the war,
Britain had 56,000 trucks and 36,000 cars. France had 70,000 trucks and 12,000
airplanes. In addition, the United States shipped over 50,000 motorized vehicles
to Europe and, within a year and a half, built some 15,000 airplanes. Motorized
transport began to dramatically change the nature of war, and petroleum was the
fuel that drove the revolution in modern warfare.6 Development of the airplane
and the tank — first used at the Battle of the Somme in 1918 — provided
mobility and power unprecedented in the history of warfare.
It also had become clear, therefore, to leading political and military circles in
London and Washington that control of major oil resources was the key to a
power’s future military success. Conversely, denial of control over oil resources
could defeat a potential enemy even more effectively than guns.

Secret War for the Baghdad Railway

In 1899 the German Empire had signed an agreement with Ottoman Turkey that
was to alter the course of history and ultimately precipitate British reactions that
led to the outbreak of the Great War in 1914. The agreement, backed by the
powerful German Deutsche Bank of Georg von Siemens, created a concession to
Deutsche Bank for the construction of a railroad linking Berlin to the far reaches
of the Ottoman Empire in Mesopotamia — what is today Iraq.7

As part of the Baghdad railway agreement, Deutsche Bank’s Karl Helfferich also
won for the German consortium the subsurface mineral and oil rights within a
zone twenty kilometers on either side of the railway to Baghdad, a line going
directly through the newly discovered oilfields of the Mosul region some 400
kilometers north of Baghdad. By 1913 German geologists had confirmed large
petroleum deposits to the south of Mosul along the Tigris River going towards
Baghdad near the city of Kirkuk. The route of the German-Baghdad Railway
conveniently traced the outline of the new oil regions. 8

Meanwhile Britain, anxious to block any future threat to her Indian colony,
countered the German Baghdad agreement of 1899 by concluding its own secret,
exclusive agreement with an unscrupulous Sheikh Mubarak-alSabah of Kuwait,
converting that chunk of Ottoman real estate into a British “lease in perpetuity.”
By 1905, through the intrigues and machinations of British master spy Sidney
Reilly, Britain’s Lord Strathcona obtained exclusive rights for his company, the
AngloPersian Oil Company, to the oil of Persia. The British Royal Navy was on
the verge of converting its entire fleet from coal to the more efficient oil-fired
engines; securing strategic oil resources had become a matter of the highest
national security. 9
Stealing Mesopotamia for the Empire

On July 28, 1914, two historic events occurred. Heir to the AustroHungarian
throne Archduke Francis Ferdinand was assassinated by Gavrilo Princip, a
member of a Serbian secret society with alleged ties to British and French secret
societies,10 precipitating the chain of events known as the Great War. On that
same day, Britain secretly acted to secure oil exploration rights in what would
become a British Mandate territory after the war – Iraq – one of the richest oil
regions of the world. London was clearly thinking ahead.
Copy of a detailed map of the oilfields of Mesopotamia (today Iraq), from the
London 'Petroleum Review' dated May 23, 1914, before the outbreak of the First
World War. Those oilfields became British as a result of the war.

Meanwhile, a Turkish-born Armenian businessman and naturalized British

citizen named Calouste Gulbenkian, had become a major shareholder of the
Rothschild’s Anglo-Dutch oil company, Royal Dutch Shell. Gulbenkian had also
secretly secured for the British government a 50% share in the Turkish
Petroleum Company from the Turkish National Bank through the British
government’s AngloPersian Oil Company. 11

With that deft move, what had been a 75% German-Turkish oil enterprise — a
company with exclusive oil rights along both sides of the newlybuilt
BerlinBaghdad railway, with a 25% minority British share via Shell — now
became a company controlled 75% by British interests. The German dreams of
secure oil from Mesopotamia were not to be realized.

The Turkish Petroleum Company had obtained exclusive exploration rights to

the rich, recently discovered oil fields near Mosul, then Mesopotamia, a part of
the Ottoman Empire. Leading circles in London were already preparing in early
1914 for control of the vast oil resources of the Middle East in the postwar
world. Before Gulbenkian’s secret coup, the Turkish Petroleum Company had
been owned 25% by Germany’s Deutsche Bank, the bank financing the Baghdad
rail project. Another 25% was held by British Shell and 50% by the Ottoman
Central Bank. 12

Indeed, one of the little known factors leading Britain to precipitate war in 1914
against the German Empire was the existence of Germany’s BerlinBaghdad
Railway project. This was no minor geopolitical event as London saw it. The
geographical position of the Ottoman Empire was strategic, dominating the
Balkans, the Dardanelles Strait, and territory extending to the Shatt al-Arab
waterway into the Persian Gulf, and from Aleppo to Sinai bordering the strategic
Suez Canal link to British India, down to Aden at the Strait of Bab el Mandab.

The German-Ottoman agreement assured final construction of the

BerlinBaghdad Railway and with it, exclusive rights to mineral resources along
the railway extending for twenty kilometers on both sides — thus shattering
England’s plan to bring Mesopotamia, with its strategic location and its oil,
under exclusive British influence. The German-Ottoman strategic linkup, more
than any other, threatened essential British strategic interests on the eve of the
Great War. 13

A little war for rich booty

To finally secure exclusive control over the oil fields of Mesopotamia after the
war in Europe had ended and an Armistice had been signed on November 11,
1918 between a defeated Germany and the Allied Powers (Britain, France, Italy
and the United States), Her Majesty’s British Government incited and armed the
forces for a new war — a war to secure her richest booty of all.

In May 1919, a mere six months after the end of the European war, London
instigated a Greek military invasion of defeated Ottoman Turkey, not with
British soldiers, of course, but with the Greek army under the control of Prime
Minister Eleftherios Venizelos. British and Greek diplomats were secretly
drawing up the terms to be imposed on defeated Turkey. The planned Sevres
Agreement would dismember the vast Ottoman Empire as booty of war, dividing
the spoils among various powers, including France and Greece. Naturally Britain
would be holding the knife.

The Sevres terms were Carthaginian, to put it mildly. Alleging high costs of
maintaining an Allied occupation army in Turkey, as well as British and Allied
war costs, Turkey was to pay a huge debt to England and the Allied Powers. A
new Inter-Allied Financial Commission was to be superimposed onto the
existing Anglo-French Ottoman Public Debt Administration. The new Financial
Commission would have full control of Turkey’s taxation, customs, loans and
the national currency along with control of the State budget and absolute right of
veto. The British draft of the Sevres statement argued that all this was being
imposed on a new Turkish state “to help Turkey to develop her resources, and to
avoid the international rivalries which have obstructed these objects in the past.”
14

To secure the terms it was drafting in the Sevres agreement, Greek Prime
Minister Venizelos had secretly been assured by British Prime Minister Lloyd
George that Greece could take prime pieces of Ottoman Turkey as a prize of
war, including what today is Izmir on the Turkish Aegean and Thrace, the
European part of Turkey, dividing Istanbul across the Bosporus Strait.15 These
were to be Greece’s reward for joining the Allied side in the war against
Germany and Ottoman Turkey.

The promise of Lloyd George and the British to Venizelos at the Versailles
peace talks was part of a British geopolitical strategy aimed at Balkanizing the
Ottoman Empire and securing for England exclusive rights to that part of the
Empire that was Iraq. Britain used Greek soldiers as proxy cannon fodder to
attain her goals.

Venizelos had been recruited to the British Secret Service as early as 1899 when
he was a minor official in Crete. He had been recruited by a master British agent
named Basil Zaharoff. 16 Zaharoff, an unscrupulous arms dealer — the original
“Merchant of Death” — provided Venizelos’ army with enough weapons to take
the Turkish lands by force in 1919.

Zaharoff, born in Ottoman Turkey of Greek parents, had become one of the most
successful arms merchants before and during the First World War. He was
knighted by Britain and made a member of the board and largest shareholder of
Vickers, the leading British armaments maker. 17

Zaharoff now set about to arm a Greek army and, on behalf of Britain, as the
official agent of Lloyd George for Asia Minor affairs, to dismantle the vast
Ottoman Empire to the advantage of England. Little did it matter to London that
the Great War had ended. After all, it was about reaping the rewards of victory,
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