This week Libya is marking forty years since Moammar Qadhafi came to power in a coup against King Idris
. One aspect of Qadhafi's early regime not getting much attention is the role he played in the progress of the transformation of the international petroleum market into one which favors governments in countries which have crude oil. When he came to power, the global oil industry was dominated by a group of interlocked oil majors called the "Seven Sisters." Libya's oil, however, was discovered fairly late, and the contract somehow wound up in the hands of Armand Hammer's Occidental Petroleum, which had no other sources of oil with which to meet delivery commitments. When the Qadhafi government started demanding higher prices, Occidental had to play along. Qadhafi's move was seen as highly risky, since the last nationalist threat to Western corporate control over Middle Eastern oil, Muhammad Mosaddeq, was deposed in a CIA-arranged coup. Perhaps because of its involvement in Vietnam, and U.S. didn't move against Qadhafi, and a new precedent was set which the Shah of Iran quickly took advantage of, followed by other OPEC nations.
On another note, Laila Lalami remembers Libya's political prisoners
Labels: Energy Business, History, Libya