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The Masquerade 325

hastened from 1970 onwards by Britain’s growing infirmity and by the increas­

ingly feverish condition of Arab politics.
With every change of regime that has occurred in the Arab lands of the

Middle East in the past two decades or so there has been a further deterioration
of respect for law and civilized processes, and a corresponding reinforcement
of the propensity to resort to violence to gain whatever ends may be in view. It
is hardly surprising, therefore, that as time has gone by the international oil
companies have become less and less of a match for the governments with
which their operations compel them to deal. Indeed, it is doubtful whether, in
the quarter-century which has elapsed since the settlement of the Anglo-
Persian oil dispute in 1954, the companies have been in a position to put up any
determined opposition to a Middle-Eastern government. To say this, however,
is really to raise a false issue, for at almost no time during these twenty-five
years have the major companies engaged in the production of Middle-Eastern
oil-Standard Oil of New Jersey (Esso), Standard Oil of California (SOCAL),
Socony-Mobil (Mobil Oil), Gulf Oil, Texaco, British Petroleum, Royal
Dutch Shell and Compagnie Franchise des Petroles - shown any firm disposi­
tion to run the risks to their concessions and investments which such opposi­
tion would have entailed. The companies’ primary interest was in obtaining
access to the oil reserves of Libya, Persia, Iraq and the Gulf in the quantities
they wanted and at prices the market would bear. Whenever this interest was

threatened, or appeared to be threatened, by complaints from the concessio­
nary governments about the workings of the concessionary agreements or by
allegations about the companies’ manipulation of the international petroleum
market, the companies were normally at pains to remedy the complaints or
disprove the allegations. In short, the response was placatory, and as often as
not it took the form of increasing the host governments’ share of profits from
the production of crude oil.
The first such accommodation after the Second World War took place late in
I95°5 when, following the precedent set two years earlier by the government of
Venezuela, the Saudi government demanded and received from ARAMCO an
undertaking to share its profits with Saudi Arabia on a fifty-fifty basis.
ARAMCO’s willingness to meet the Saudi demand was inspired not just by
the size and importance of its oil concession in Saudi Arabia but also (as related

in a previous chapter) by the readiness of the United States government to
compensate the company for the reduction in its earnings by classifying the
increased revenue payments as foreign income tax and, as such, allowable
against ARAMCO’s tax liability in the United States. Other oil companies
operating in the Gulf were forced to follow ARAMCO’s lead, and their home
governments to adopt the same tax procedure. It seemed at the time, despite
the serious loss of tax revenue to the Western governments concerned, a
reasonably painless means of satisfying the desire of the oil-producing states for
more money; but in fact, by implanting in the minds of the rulers of these states