Roosevelt's Oil Gambit: A Confrontation Behind Closed Doors

As World War II loomed on the horizon, the US government and domestic oil producers found themselves at odds over how to manage the country's oil reserves. Domestic oil companies wanted to increase production, while Washington sought to conserve resources.

The conflict created an opportunity for President Franklin Roosevelt to reshape the relationship between the US government and American oil interests abroad. In June 1943, he approved the creation of the Petroleum Reserves Corporation to bring under greater federal control American oil interests in Saudi Arabia.

Interior Secretary Harold Ickes advocated for direct government control over all oil resources owned by American companies in Saudi Arabia. The corporation's board was designed to ensure direct government oversight, with members including the secretaries of war, navy, and state.

Faced with opposition from the private oil industry and Congress, the Roosevelt administration froze many of its plans for a government-led national security strategy focused on Middle Eastern oil. Instead, it opted for 'the deal that keeps oil flowing', which essentially meant oil in exchange for security.