790.00/4–946
Memorandum Prepared in the Department of State
Policy and Information Statement on Arab Principalities of the Persian Gulf and the Gulf of Oman
I. Current US Policy Toward the Arab Principalities of the Persian Gulf and the Gulf of Oman
A. General Political. (1) While we recognize the special position of Great Britain in the Sheikhdoms of Kuwait, Bahrein, Qatar and the Trucial Coast, our policy toward this area is based upon insistence that Britain’s special position in those principalities should not result in injury to US interests or those of the local peoples and governments. (2) Our policy toward the Sultanate of Muscat and Oman is based upon one of our oldest treaties still in force, the Treaty of Amity and Commerce of September 21, 1833.
Special treaties and agreements, dating from the 19th Century, bind all the Sheikhs of the Persian Gulf Principalities to Great Britain. At first (in 1820) these Sheikhs were “bound” to assist the British in eliminating piracy and in putting an end to the traffic in arms and slaves. By a series of subsequent exclusive agreements the Sheikhs guaranteed the British monopolistic rights in their lands, in return for British protection.… Between 1913 and 1923 the Persian Gulf Sheikhs further bound themselves not to grant any concessions for oil within their territories without the approval or consent of the British Government (Kuwait in 1913; Bahrein in 1914; Qatar, for a blanket monopoly, oil not specified in 1916; the six Trucial Sheikhs in 1922). The Sultan of Muscat and Oman agreed, in 1923, to “consult” the Political Agent and the Government of India before exploiting oil in his Sultanate. The Sheikhdoms are protected by the British Government; they are not British Protectorates. The British have consistently maintained that these Sheikhs are “independent rulers in special treaty relationship with His Majesty’s Government.” The position of the rulers of the Persian Gulf might be thought of as that of independence regulated, supervised, and defined by HMG.
[Page 66]… Fourteen years later1 Iran revived its historical claim to sovereignty over the Bahrein Islands. The Iranian Government protested against Article 6 of the Treaty of May 20, 1927, between Great Britain and Saudi Arabia, in which reference was made to the special position of the British in the Gulf Sheikhdoms. The Iranian claim was categorically rejected by the British Government on historic and other grounds. Again, in May and December, 1934, Iran made various representations and protests—on the subject of the oil concession obtained in Bahrein by the Standard Oil Company of California—to the United States Government2 and the Standard Oil Company of California, in an effort to invalidate any concession granted in Bahrein that took no account of Iran’s claim to sovereignty over the Islands. These Iranian protests were ignored by the United States Government at the time; and the League of Nations, though notified of the dispute, took no action. At no time has the United States, Great Britain, Saudi Arabia or any other Near Eastern State shown any disposition to recognize that Iran has a valid claim to sovereignty over the Bahrein Islands. It is of some significance, however, that the Soviet press has recently carried articles which have pointed out Iran’s long-standing claim.
By our Treaty of Amity and Commerce with the Sultan of Muscat and Oman, the United States is accorded extraterritorial rights in the dominions of the Sultan. This is, therefore, the one Gulf Principality in which the United States has a position entirely independent of Great Britain and the Political Agents of the Government of India. However, American missionaries of the Reformed Church in America (Dutch) have been active in various parts of the Persian Gulf since 1889, and have established schools and hospitals at Bahrein and at Kuwait as well as at Muscat. Other than medical and missionary work, the only additional US interests in the Persian Gulf area are oil and communications.
Following the failure of British interests to exploit the petroleum concession which they had been granted by the Sheikh of Bahrein in December 1925, and after several years of complicated negotiations, British consent was eventually obtained for the grant of an oil concession by the Sheikh to the Bahrein Petroleum Company Ltd., a registered British (originally Canadian) company, whose shares are owned wholly by the Standard Oil Company of California and the Texas Company. The first concession, covering the exploitation of 100,000 acres on Bahrein Island, was assigned to the Bahrein Petroleum [Page 67] Company on August 1, 1930, and the Sheikh of Bahrein granted the company a Mining Lease for a 55-year period from January 1, 1935. Oil was discovered in 1932. An “Additional Area” concession was granted by the Sheikh on June 19, 1940. A special Political Agreement was thereupon signed by the Bahrein Petroleum Company with the British Government on June 29, 1940. Under the terms of this Political Agreement the Company is obligated to pay “due deference” to the advice of the British Political Resident in the Persian Gulf and the Political Agent at Bahrein. It is also important to note that in the event of national emergency or war, the British Government has reserved the right to take over all of the Bahrein crude oil and the products thereof. Furthermore, the India Office proved unwilling to permit the US interests to enter into negotiations for oil concessions with the Sheikh of Qatar or with the six Sheikhs of Trucial Oman.
Oil interests on the Arabian side of the Persian Gulf are divided as follows: The Kuwait Oil Company holds the concession for the whole of Kuwait; the Anglo-Iranian Oil Company (British controlled) and the Gulf Exploration Company (US owned and controlled) share equally in the ownership of the Kuwait Oil Company. The Arabian American Oil Company, wholly American, holds the concession for about ¾ of Saudi Arabia. The easternmost part of this concession covers the Persian Gulf coast of Saudi Arabia, between Kuwait and Qatar. The Bahrein Petroleum Company, Ltd. is US-owned, but registered as a British company. The Standard Oil Company of California and the Texas Company jointly own both the Bahrein Petroleum and the Arabian American Oil Companies. Petroleum Development Ltd. (a subsidiary of the British controlled Iraq Petroleum Company) holds current concessions for all of Qatar and the Trucial Coast. There were indications as recently as 1941, that Petroleum Development Ltd. still held a concession for the exploitation of oil in the Sultanate of Muscat and Oman.
Since 1936 the Bahrein Petroleum Company, employing British and Bahreini as well as US labor, has built modern oil installations, pipe lines, and oil refinery and loading wharves, and an up-to-date camp with recreational facilities at Awali on the main island. US influence in the Bahrein Islands grows in proportion to the expansion of this US colony.
In view of our existing oil interests in the Bahrein Islands, our great oil interests on the eastern coast of Saudi Arabia adjacent to these islands, and our somewhat lesser though important oil interests in neighboring Kuwait; and in consideration of the special position of Great Britain throughout the Persian Gulf Area; it is our present [Page 68] policy: (1) to give all possible diplomatic support to US commercial interests, both present and potential, vis-à-vis the British and local Governments; (2) to cooperate harmoniously with Great Britain and British officials in the Gulf Area, with a view to expanding our existing business interests wherever practicable; (3) to encourage and support US missionaries in the Persian Gulf in their medical and educational work.
. . . . . . . . . . . . . .
- In 1927.↩
- For documentation on Persian claims to sovereignty over Bahrein, see Foreign Relations, 1934, vol. ii, pp. 890 ff.↩