Secret Oil Denial Policy Lasted at Least until the Kennedy Administration

U.S., Britain Developed Plans to Disable or Destroy Middle Eastern Oil Facilities from Late 1940s to Early 1960s in Event of a Soviet Invasion

National Security Archive Electronic Briefing Book No. 552
Edited by Steve Everly*
Recently discovered British documents posted  by the National Security Archive provide a new and revealing account of the CIA’s role in a top-secret plan to ravage the Middle East oil industry. It’s been 67 years since President Harry Truman approved NSC 26/2 to keep the Soviet military from using Middle East petroleum if it invaded the region. This denial policy called for American and British oil companies in the Middle East to disable or destroy oil facilities and equipment, and plug the region’s oil wells. The policy evolved during Eisenhower’s presidency and lingered at least into the Kennedy administration.

oil-well-airplane-camel-480Modern and traditional modes of transportation posed together in front of an oil derrick in the Persian Gulf. (Credit: DeGolyer Library, Southern Methodist University, Robert Yarnall Richie Photograph Collection.)

Documents stashed at Britain’s National Archives show for the first time the CIA’s dominant role in turning the oil companies into a paramilitary force ready to execute the denial policy. (This posting’s author has written a separate article on these materials published by Politico. http://www.politico.com/magazine/story/2016/06/oil-denial-policy-cia-middle-east-cold-war-united-states-britain-soviet-union-213983   ) The intelligence agency’s oversight included inserting undercover operatives into oil-company jobs to spy on some of the companies. The CIA created – with an American oil company’s assistance – an ambitious denial plan for Saudi Arabia and exported similar plans to Kuwait, Bahrain and Qatar where Britain was the governing authority. The CIA also assisted British denial plans in Iran and Iraq.

British documents also reveal discussions about using nuclear weapons in Iran and Iraq. State-controlled refineries emerged in both countries and were not covered by existing denial plans which depended on cooperating oil companies. British military officials believed nuclear bombs were an option to destroy these facilities until a plan using ground demolitions with conventional explosives was possible.

The denial policy has grudgingly given up its secrets. NSC 26/2 was mistakenly declassified in 1985 by an archivist at the Truman Presidential Library which is part of the National Archives and Records Administration. A library official in a legal deposition deemed it the worst security breach in the National Archives’ history. A furious CIA demanded the archivist be fired, but he remained a library employee after losing his top-secret clearance. NSC 26/2 was reclassified top secret, but by this time Research Publications, a Connecticut company, had sent it along with other microfiched documents to libraries across the country. The microfiche weren’t recalled after a government decision – it’s not clear by whom – that it would arouse attention. NSC 26/2 became public in 1996 in a story by this writer and Charles Crumpley in The Kansas City Star.

The denial policy even today is partially cloaked by classification restrictions. But American and British documents now available allow the most complete account yet of the murky mix of the CIA, Big Oil and national security injected into the most oil-rich piece of real estate on earth. This account goes beyond revelations about the CIA and nuclear weapons to show a determined effort – replete with successes and setbacks – to organize the denial policy while keeping it secret from targeted countries such as Saudi Arabia, Iran and Iraq.

duce-457James Terry Duce, an Aramco executive integrally involved in the oil denial planning. (Credit: DeGolyer Library, Southern Methodist University, Robert Yarnall Richie Photograph Collection.)
NSC 26/2 was replaced in 1953 by the Eisenhower administration with NSC 176, later renamed NSC 5401, which put more emphasis on plugging oil wells to “conserve” Middle East oil for later use by the West. But the policy still called for oil companies to disable or destroy facilities and equipment to stall the Soviets. Concerns about security leaks to host governments and the denial policy’s effectiveness forced a restructuring in 1957. The new policy, NSC 5714, dealt mainly with protection and conservation including well plugging and passive defenses for oil facilities against airstrikes and sabotage. This would be done by the oil companies in cooperation with Middle East governments. Plans for the companies to disable or destroy facilities and equipment were shelved. Instead, the military as a last resort would destroy them with “direct action” if they were about to be seized by the Soviets. The Kennedy administration in 1963 asked the State Department if NSC 5714 was still U.S. policy. A response is not in the file.

Source note: The Ministry of Defence and British Foreign Office documents provided interesting details about the denial policy. But the Ministry of Fuel and Power, an ally of British oil companies, was an unexpectedly valuable source, especially about the CIA’s involvement. This government agency participated in meetings about the policy and routinely received relevant memoranda and other documents. Ministry of Fuel and Power files about the Middle East denial policy included POWE 33/1841 which is closed to the public, but POWE 33/1899 is open at Britain’s National Archives.

U.S. documents have some references to the CIA, but not with the detail found at the British archives. But National Security Council files do offer an increasingly insightful account of the overall denial policy. These documents are at the Harry S. Truman Presidential Library, Dwight D. Eisenhower Presidential Library and the National Archives and Records Administration in College Park, Maryland.

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