Money, Oil and Empire in the Middle East: Sterling and Postwar Imperialism, 1944–1971 (review)

The role of sterling in the postwar international financial system, the politics and economics of Middle East oil, and the gradual demise of the British Empire in the Middle East are important topics that are usually covered separately. Galpern, however, brings them together and demonstrates how they related to each other. According to Galpern, British Treasury officials and others believed that Britain’s profits from Middle East oil and the dollar savings accruing from its ability to draw on sterling oil were vital to the continued viability of sterling as a leading international currency. The centrality of Middle East oil in British plans to secure an independent political and economic powerbase after the war deeply influenced British policies toward the Middle East.

Galpern constructs his argument on the basis of extensive research in British government records—particularly Treasury files—British Petroleum records, and a selection of U.S. government documents, as well as a good command of the relevant secondary literature. Although Galpern’s focus is on the sources of British policies, greater attention to U.S. policies and actions and to the aspirations of Middle East nationalists would have added depth to his study. Control of oil was an important element in U.S. power and influence, and the United States differed with Britain about the best way to contain Middle East nationalism and preserve the Western position in the region.

Although scholars have already studied most of the topics covered in this book, Galpern provides new insights by highlighting the importance that British policymakers attributed to maintaining the viability of the pound sterling as an international currency. He also excels in his ability to convey the complexities of international finance in plain, non-technical language that even non-specialists should be able to understand. Britain’s determination to maximize its gains from Middle East oil to bolster the pound had a profound effect on its its policies regarding such important issues as the 1944 and 1945 Anglo-American Oil Agreements (neither of which were ratified), the sterling-dollar oil conflict of 1949/50, its confrontation with Iranian nationalism between 1951 and 1954, the Suez Crisis (characterized as a “sterling rescue mission gone wrong”), and its efforts to influence the disposition of Kuwait’s oil earnings. The conclusion links the British devaluation of the pound in 1967 with the end of empire in the Middle East. A brief, but informative afterword compares the British experience with money, oil, and empire in the Middle East with the situation that the United States faces in the first decade of the twenty-first century.

Money, Oil and Empire in the Middle East makes an important contribution to the historiography of the British Empire in the postwar period. Galpern’s effort would have been stronger and timelier, however, had he analyzed more fully the role of Iraq and Iraqi oil in British imperial strategy. Although Iraqi oil may not have been as important to Britain as Iranian or Kuwaiti oil, the inclusion of Iraq in the study would have provided a fuller picture of the interrelationships between money, oil, and empire in the postwar Middle East.