'The Allied cause had floated to victory on a wave of oil," observed Britain's Lord Curzon.
He was speaking soon after the First World War, which ended 94 years ago last Sunday. It was the first war in which oil played a key role. And its aftermath laid down patterns in Middle East oil that persist today.
Curzon, then the British foreign minister, had toured Persia, now Iran, extensively 20 years before.
In the rugged mountains of its south-west, near an ancient fire-temple known as Masjid-e Soleiman (the Mosque of Solomon), a British company, Anglo-Persian, would discover oil in 1908.
As the first lord of the admiralty just before the First World War broke out in 1914, Winston Churchill drove through the conversion of the Royal Navy's ships from coal to oil power.
Churchill also championed the government's acquisition of a controlling stake in Anglo-Persian (now BP), to ensure Great Britain had a secure source of oil.
The oil-fired navy was able to ensure British dominance of the high seas during the war. It overcame the threat of German submarines, and slowly starved Germany itself into submission by a blockade.
On land, oil set the future pattern of mechanised warfare, and was crucial to breaking the bloody stalemate on the Western Front, in which some four million soldiers died. Lorries replaced horses in the logistical efforts; tanks displaced them in the front line and finally broke the German defences late in 1918. Planes evolved from reconnaissance into bombers capable of hitting Berlin.
Most Allied oil came from the United States, while the Germans had little of their own. They occupied Romania, but the fields there were sabotaged before they arrived. By the time of the armistice, Germany had only two months of oil supplies remaining.
In 1914, the British occupied Basra, then part of a Turkish province, to protect the Persian oilfields. Continuing their advance, after setbacks, General Maude captured Baghdad in March 1917.
Once in the city, he issued his famous proclamation: "Our armies do not come into your cities and lands as conquerors or enemies, but as liberators", eerily foreshadowing similar declarations during 2003's American-led invasion. Sir Frederick Maude died there on November 1917, and a plaque commemorating him hangs on the wall of the British Embassy.
The US, worried about its domestic oil supplies in the wake of a postwar economic boom, demanded an "open-door" policy. This was neither the first time, nor the last, that wrong ideas about the scarcity of oil have driven geopolitical competition.
Eventually, the Americans obtained a quarter of the consortium that then acquired concessions throughout the Middle East. Remarkably, the onshore oil concession in Abu Dhabi, up for renewal in 2014, is the direct descendant of this consortium - featuring BP, Royal Dutch Shell, ExxonMobil and Total.
After the war, the Allies carved up the former Turkish provinces of the Middle East between them. Suspecting the geology around Mosul was promising, the British negotiated its transfer from French-ruled Syria to their new state of Iraq, in return for giving the French a quarter-share in any oil found.
Disposing of the fate of millions of people so casually, this arrangement played a part in Iraq's subsequent tragic history, and in the continuing dispute between the Kurds and Baghdad over oil rights.
"As oil had been the blood of war, so it would be the blood of the peace," responded a French senator to Curzon.
As we commemorate all those killed in the First World War, we should also acknowledge the suffering in the Middle East, driven in part by those oil-fuelled decisions made after November 1918.
Robin Mills is the head of consulting at Manaar Energy, and the author of The Myth of the Oil Crisis and Capturing Carbon
Asia Cup Qualifier
Venue: Kuala Lumpur
Result: Winners play at Asia Cup in Dubai and Abu Dhabi in September
Fixtures:
Wed Aug 29: Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30: UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1: UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2: Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4: Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6: Final
Asia Cup
Venue: Dubai and Abu Dhabi
Schedule: Sep 15-28
Teams: Afghanistan, Bangladesh, India, Pakistan, Sri Lanka, plus the winner of the Qualifier
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Abaya trends
The utilitarian robe held dear by Arab women is undergoing a change that reveals it as an elegant and graceful garment available in a range of colours and fabrics, while retaining its traditional appeal.
So what is Spicy Chickenjoy?
Just as McDonald’s has the Big Mac, Jollibee has Spicy Chickenjoy – a piece of fried chicken that’s crispy and spicy on the outside and comes with a side of spaghetti, all covered in tomato sauce and topped with sausage slices and ground beef. It sounds like a recipe that a child would come up with, but perhaps that’s the point – a flavourbomb combination of cheap comfort foods. Chickenjoy is Jollibee’s best-selling product in every country in which it has a presence.
MATCH INFO
Chelsea 0
Liverpool 2 (Mane 50', 54')
Red card: Andreas Christensen (Chelsea)
Man of the match: Sadio Mane (Liverpool)
