The Great Anglo-American Rivalry in Bahrain

Great power rivalry with Britain for domination of the Gulf was altered significantly by the outcome of World War I. With the defeat of Germany , the dismemberment of the Ottoman Empire and the collapse of Tsarist Russia, Britain emerged in an uncontested position of power and control in the Gulf. At the same time, a new world power was propelled onto the international scene: the United States of America. Although Britain and the USA were allies, it was not long before competition between them began to be registered. In this post, an examination of an Anglo-American rivalry in Bahrain will be discussed from the period following WWI till the dismemberment of the British Raj.

Background Information:

The oil refinery of the Anglo Persian Oil Company (APOC)

There can be little doubt that in 1918, the Gulf had become a British lake. All the states on the Arab side, from Oman to Kuwait, had special treaty relations with Britain that controlled their foreign affairs. Within a short time, Iraq became a British Mandate, and the rich oilfields of Southern Iran were controlled by the British via the Anglo-Persian Oil Company (APOC). Moreover, the Gulf served as a landing and refueling station for trade and supplies from India to Britain.

The United States of America, by contrast, had no territorial or imperial claims in either the Gulf or the rest of the Arab world at this time. Its interests were confined to the activities and establishments of Protestant missionary groups , that have been active since the 19th century.

In the Gulf, the American missionaries of the Dutch Reformed Church provided the only medical services in the region, despite Britain's long tenure of power. Hospitals, under the Church's guidance, were set up in Kuwait, Bahrain, Muscat, Amarah and Basra. They also helped promote education. The American Missionary Hospital is a good example of hospitals established by missionaries.

The American Missionary Hospital, established 100 years ago

Ironic to present-day circumstances, Arabs were largely enthusiastic to the Americans.

Given the broken promises of Britain and France to the Arabs, in addition to the Balfour declaration, many Arabs were supportive of the Americans, emboldened further by President Wilson's Fourteen Points speech.

In fact, in Bahrain, the British Political Agent was annoyed and disturbed whenever Bahraini politicians would remind him of the policy of self-determination!

The Open Door Policy:

The entry of American oil companies in the Gulf was to crystallize the ambiguity of the Anglo-American relationship, and to bring out all the latent feelings of rivalry. The nebulous qualities of American popularity and widespread anti-British feelings in Bahrain now created a tangible situation.

Hitherto, American activity had taken place independently of the US government. The natural isolationism of the latter had never regarded the Arab world as an arena to challenge any of the interests of the European powers.

The 1919 Peace Conference [British Delegation shown]

It was only after the war, when the importance of oil as a strategic weapon was fully recognized, did the US government become directly involved in challenging Britain's hold over oil-producing regions around the world.

The Anglo-American rivalry that was an outcome of this challenge seems to have evolved at a pace that reflected the varying degrees of importance of oil. During the 1919 peace negotiations, the US delegation, secure in the knowledge of American oil reserves, 'did little to promote American oil interests and the British government, attempting to capitalize on that fact, sought to exclude all foreign oil companies from that area [Iraq and Palestine]'.

Consequently, the US pressed on for an Open Door policy on oil so that exclusive British concession would not be granted in British mandated areas of the Middle East. Lord Curzon, British Foreign Secretary, was not in favour of accepting such a policy since the British share of the world oil production was a mere 4.5%  compared to the US' 70%.

Restrictions were put in place for foreign oil companies that, for example, required them to employ British nationals prior to others. The US government objected to the British nationality clause , which it regarded as an obstacle deliberately created to exclude American companies from entering the Gulf.

The so-called "Oil Corridor"

Long diplomatic negotiations were initiated but it wasn't until January 1930, that a compromise was achieved. The nationality clause was removed by the Colonial Office, and an oil company, under the umbrella of Standard Oil Company of California (SoCal), was established, termed BAPCO: Bahrain Petroleum Company. It was formed under the conditions that :

1. that BAPCO would be a British company registered in Canada;
2. that one of the five directors of BAPCO would be (at all times) a British subject, and his appointment would be made with consultation of the British government.
3. that BAPCO would always have a Chief Local Representative resident in Bahrain whose channel of communication with the ruler of Bahrain would be through the Political Agent;
4. that as many employees as possible of BAPCO in Bahrain would be British or Bahraini subjects.

Finally, the Open Door policy was officially sanctioned. Events moved quickly after that and on the 31st of May 1932, oil in commercial quantities was struck in Bahrain. In July 1933, an oil concession deal was struck with the Saudis that would later form the basis of the Arabian American Oil Company (ARAMCO)

John Bull's Face: 1932-1939

In 1938, an article entitled 'Is John Bull's Face Red!' appeared in The American Magazine , it was written in the form of an expose about an 'embarrassing British secret - how Americans beat them to a faraway island of oil [Bahrain]'. A mere article in an ongoing rivalry.

Within a month of the signing of the SoCal deal, the Political Agent in Bahrain expressed his concern that the US government would want to establish a consular office in Bahrain. He was firm in his belief that

It would be most undesirable to have a Consul of the United States of America in Bahrain, as with the Oil interests at his back, he [the would-be American ambassador] would be likely to acquire a powerful position - indeed, he might well tend to supplant the Political Agent!

The BAPCO oil refinery.

The position of the Political Agent in Bahrain was government by the second clause of the 1892 Exclusive Agreement whereby Bahrain undertook not to assent to the residence there of any country or entity but the representative of the British government

As such, he was the only foreign representative and, after the 1919 Order-in-Council, he was empowered to exercise jurisdiction over all foreigners.

Although no population census of Bahrain was taken during the 1930s, it can be assumed that roughly 18% of the population comprised of foreigners. These were Indians, Iranians , Omanis and other Arabs.

There was no Western Community, aside from that serving the British. When BAPCO started operations, the American community started to grow.

In January 1935, there were 24 Americans workers in Bahrain. By 1938, it reached 153 American workers.

World War II and Renewed Tensions:

Once WWII began, the position of the USA began to change, regarding its Gulf policies. Three principal factors governed this change:

The first was the gradual weakening of  Britain's position in the Arab world as a result of the defeats it suffered at the beginning of the war. In 1940, for example, the Mediterranean Sea became closed to British ships; the next year, Germany controlled Yugoslavia and Greece, Rommel's Afrika Korps pushed the British back to El Alamein. In Iraq, the Rashid Ali movement threatened British control over Iraq and its strategic base at Habbaniyya. The possible consequences of the collapse of the British in the Mid-East would have been disastrous to the Americans.

The second factor was an acute financial crisis in Saudi Arabic that set in immediately after the war, due to a massive decrease in Pilgrim traffic and financial mismanagement. It was so severe that in 1940, the King appealed to the British government for money. The US saw itself as not being ready for Saudi Politics but realizing the importance of Saudi oil, sent money to Britain that was to be given to Saudi Arabia.

World War II Scenario. El Alamein is clearly noted.

The third factor was the enter of the US into the war after Pearl Harbour. The Gulf became of great strategic importance for Allied supply lines and air routes. The importance of oil was acknowledged,, particularly in 1943, when the military and naval campaigns in the Far East were growing. By this time, the major US Departments [of War, of Navy, of the Interior, of the State] were actively involved in oil diplomacy.

The old scenario had changed. Roosevelt declared Saudi Arabia to be vital to the defence of America and hence made it eligible for the lend-lease act. For the first time, Britain was perceived as the strong rival for the implementation of the new policy.

Anglo-American rivalry in the Gulf now began in earnest and in two fronts: On the diplomatic level and in the field. It should be noted,however, that both countries were very close allies and relations did not falter. But the British wanted to strengthen their hold on the region, and the Americans wanted to undermine that hold.

Once the tension between the two was recognized, efforts to rationalize the relationship were made. A landmark in the process was the 1944 Anglo-American conversations on the Middle East, held in London. British policy on the Gulf region faced criticism from the Government of India. The reaction from the Viceroy was anger, he was furious at the acknowledgement of American ambitions in the region. He was particularly worried about an American request to build a US consulate in Bahrain, which he saw as unacceptable. Regardless of the criticism, the talks carried on.

In February 1944, an exchange of telegrams between Churchill and Roosevelt illustrated the fears of both sides. Churchill appealed to the US president that there were misgivings in Britain

That the United States has a desire to deprive us of our oil assets in the Middle East on which among other things, the whole supply of the Royal Navy depends on'

Roosevelt explained his side of the problem:

I am disturbed about the rumour that the British wish to horn in on our Saudi Arabian oil reserves.

A compromise was later reached with Churchill stating that :

We are not making Sheep's eyes at your oilfields in Iraq or Iran

The talks opened on the 12th of April 1944, and lasted for two weeks. The discussion covered many countries considered Middle Eastern including: Egypt, Ethiopia, Palestine, Syria, Lebanon, Iraq, Saudi Arabia, Yemen, Oman, Iran and Afghanistan.

A map of Bahrain and nearby Saudi Arabia

The discussions concerning Bahrain revolved around the wish to establish an American consulate there. Britain refused such an action, citing previous treaty agreements as well as having the fear that this would spark a domino effect on the region. Finally, after much heated negotiations, Britain gave in and a consulate was established in early 1944 and (as predicted) , an American Consulate at Dhahran was opened in September 1944.

[It should be noted that during those times, establishing a consulate was not a simple case, as today, of adding one representative office to another and so on. It was not a routine establishment and it was very complex. It was a sign of influence and strength of a country to establish a  consulate. If one were to be established in Bahrain, it would undermine the British in Bahrain.]

Suspicions of the Americans by the British did not subside. The deployment of 270 soldiers of the US Army Transport Corps to the Consulate, added distrust. America also tried to monopolize the airline system during those times, intending to allow regular flights to and from Bahrain via American civil airlines, this however did not happen.

However, as soon as the war ended, American foreign policy in the region changed once again, this time towards the threat of Communism and of the Soviet Union. Particularly being focused on Russian activity in Iran, particularly after the Tudeh party made statements regarding Bahrain's status. The US now became less interested in Britain's position because of the risk that the Gulf would be an open door to the Russians.

The end of the war also brought with it the realization that Arab oil resources were so large that they could accommodate the interests of both USA and Britain. American policy in the Gulf now had six main thrusts:

1. To encourage the US missionaries in every way;
2. To support American commercial interests;
3. To cooperate with British officials in order to promote US business interests;
4. to refer to London any outstanding differences between Britain and the USA;
5. To establish consulates in Muscat and beyond;
6. To refrain from any measures that would open the region to Russian penetration.

The 3rd and 4th point above indicate the strength of Britain's position. Its main interest in the Gulf had always been strategic, not commercial. The fact that it had been able to withstand Americans resources had been vital to the conduct of the war attests to its ability to maintain the status quo. The political order it had created in the Gulf for over a century remained unchanged despite the dynamics of the changing economic situation. Once again, the Pax Britannica prevailed.

Based on research work done by R.S.Zahlan