Achnacarry Agreement
The Achnacarry Agreement was a top secret agreement from 1928 to form an oil cartel of all the major oil producers of the time. The respective governments ratified this agreement. The public did not find out about this cartel until 1952.
The agreement
The agreement was agreed on August 18, 1928 at a meeting of representatives of oil production companies in Achnacarry Castle . Participants included a .:
- John Cadman of the Anglo-Persian Oil Company
- Henri Deterding from the Royal Dutch Shell
- Walter Teagle from Standard Oil of New Jersey
The so-called "Seven Sisters" belonged to the cartel:
- Standard Oil of New Jersey
- Mobil (Standard Oil of New York)
- Gulf Oil
- Texaco
- Standard Oil of California
- Royal Dutch Shell
- Anglo-Persian Oil Company
In the 1920s there was competition among oil companies. This became noticeable in India between Standard Oil of New York and a branch of the Royal Dutch Shell . With the As-Is Agreement, seven principles were agreed to limit “excessive competition”, which would have led to excessive overproduction. This included dividing the markets (geographically according to the Red Line Agreement , according to oil fractions), fixing prices and restricting the expansion of production capacities. The agreement inhibited the expansion of oil production capacities in the Middle East by restricting price competition in the product market and supported the price of products made from crude oil from the USA and Canada, i.e. politically safe areas . The strategy was a geo-referenced price structure in which the sellers calculated their Free On Board (FOB) prices according to one or more base point location factors from a table plus standardized freight costs. For the crude oil of the Middle East, which had to be extracted with little effort, this system meant that the development of production capacities was delayed by the exploitation of existing concessions until World War II and reserves were exploited in the USA and Canada. In 1928, the agreement cut back more than a third of global crude oil production. Companies feared that if there was competition, the low cost of low-cost oil production in the Middle East without market expansion would add to their costs. The resulting distribution of production among the countries of the Middle East and intensifying decolonizing tendencies among the populations were most pronounced in Iraq and Iran. The agreement established a pattern for securing profits in the oil business, which OPEC later tried to imitate.
Exposure
This as-is agreement was revealed in 1952 in a report entitled The International Petroleum Cartel by the Federal Trade Commission to the subcommittee of the US Senate.
interpretation
According to F. William Engdahl, it was a kind of armistice in the struggle for financial and economic supremacy in the world between Great Britain and the USA.
See also
literature
- F. William Engdahl : With the oil weapon to world power . Wiesbaden 1993, p. 119 f.
Individual evidence
- ^ Draft Achnacarry Agreement, August 18, 1928 ( Memento of October 20, 2011 in the Internet Archive )
- ^ Edith T Penrose : The Large International Firm in Developing Countries: The International Petroleum Industry . Westport, CT: Greenwood Press, 1976.
- ^ Anthony Sampson: The Seven Sisters: The Great Oil Companies and the World They Shaped . New York: Bantam, 1991.
- ↑ Petroleum swapping between the oil giants ( Memento from October 20, 2011 in the Internet Archive )
- ^ United States Congress. Senates. Select Committee on Small Business. Subcommittee on Monopoly. The International Petroleum Cartel: Staff Report to the Federal Trade Commission. 82nd Congress, 2nd session. Washington, DC: United States Government Printing Office , 1952.