Red Line Agreement of 1928
The Red Line Agreement of 1928 was a historic agreement between five major international oil companies that effectively carved up the Middle East`s oil resources. It was a landmark agreement that influenced the oil industry for decades to come, and its effects are still felt today.
The agreement was signed in 1928, during a time when oil was becoming an increasingly important commodity worldwide. The oil companies involved in the agreement were Standard Oil of California, Anglo-Persian Oil Company (later renamed BP), Royal Dutch Shell, Compagnie Française des Pétroles (later known as Total), and Near East Development Corporation.
The Red Line Agreement was named after a red line drawn on a map of the Middle East, which represented the areas where the oil companies were granted exclusive exploration and production rights. The areas covered by the agreement included much of what is now Iraq, Iran, Kuwait, and Saudi Arabia.
The agreement was significant for several reasons. First, it established a system of production quotas, which allowed the oil companies to control the amount of oil produced and sold. Second, it created a framework for cooperation between the companies, which allowed them to coordinate their operations and avoid competing against each other. Lastly, it gave the companies a significant level of control over the oil resources in the Middle East, which would shape the geopolitical landscape of the region for decades to come.
The agreement lasted until 1948 when the participating companies agreed to dissolve it. However, its impact on the oil industry and the Middle East cannot be overstated. The Red Line Agreement effectively laid the foundation for the modern oil industry in the Middle East, which is now dominated by a handful of international oil companies and sovereign states.
In conclusion, the Red Line Agreement of 1928 was a landmark agreement that shaped the global oil industry and the geopolitical landscape of the Middle East. Its influence can still be felt today, and it serves as a reminder of the power of international corporations and the importance of resource allocation in shaping the world we live in.