This is good read
I apologize for the length, but so many things tie into this one story that it will take a few posts to explain even a condensed version.
The story has many facets, but I will start with the reality of why we are talking about going to war with Syria and let things tie in as they come up. It all starts with Iran and Saudi Arabia, way back in 1901 when a wealthy Englishman, William Knox D'Arcy, approached Mozzafar al-Din Shah Qatar, the ruler of Iran, about an oil concession. The oil industry worldwide was booming and growing, and local reserves, especially in England, were insufficient for the demand. Shah Qatar agreed, and the Anglo-Persian Oil Company was founded with vast oil reserves found under the sand. This started a boom in the Middle East with other countries searching for oil under various countries with various concessions... at least outside the United States, who was behind the curve in exploration of International oil.
When the Standard Oil of California (SOCAL) finally decided that perhaps foreign oil reserves would be a profitable venture, there were precious few countries left to explore. Europe and India had closed all concessions except for one: Saudi Arabia. Saudi Arabia did not have the geological signatures that at the time were thought to coincide with oil deposits, and as a result the Saudis watched as their neighbors became filthy rich while they were left destitute. So they were happy to grant a concession when SOCAL approached them in 1933. SOCAL struck oil, which would turn out to be the largest reserves in the area, in 1938, making the Saudis wealthy. Since that day, the Saudis have been friendly to US interests.
In Iran, there were problems brewing almost since the concession was signed. Iran's Constitutional Revolution started in 1905 and lasted for two years before giving way to various attempts by deposed Shahs to reclaim the throne from the ruling body, the Majiles. The Majiles were a democratically elected parliament that has for a short time served as a type of co-ruler beside the Shahs of the Qatar Dynasty, but the Majiles were unhappy about the concessions signed to the oil companies. The feeling was that too much control had been given to outside interests over what was an Iranian asset. Finally, after a series of internal events too numerous to list outside of a large book, the Majiles accepted Reza Shah as ruler in 1921.
What most people don't realize is that Reza Shah had help obtaining his position. American business men had begun investing in the Anglo-Persian Oil Company during this time, and both American and British interests assisted the new regime. Reza Shah was sympathetic to Western interests and would put to an end the turmoil that had threatened the concession rights to Iranian oil. The main accomplishment so far as the oil interests were concerned, was that he managed to decrease the authority of the Majiles. He turned out to be a fairly decent ruler, however, and in general had the support of his people. Reza Shah was responsible for the vast majority of the Westernization of Iran, even changing the name from Persia to Iran. In 1941, British troops forced his abdication to his son, Mohammed Reza Shah.
Mohammed Reza Shah was another story altogether. The Iranian people hated him; Mohammed Reza turned out to be a poor ruler who ignored the needs of his people and who ruled with an iron hand and according to his mood. In 1975, that mood saw proper to establish a single-party government and to declare any citizens who disagreed with the Monarchy as illegal activists. He did retain one characteristic of his father: he was happy to accommodate Western interests. He also was forced to abdicate his throne, but this time it was by the reformed Majiles who seized power in a violent revolution. In 1979, several Iranians seized the United States Embassy and held its occupants hostage until January 20, 1981, demanding the return of Mohammed Reza Shah to Iran for justice. The Shah was never returned, and that incident has left a deep scar in the psyche of Iranians who now see the United States as the major cause fo the tumultuous history they endured.
Why is this history lesson important? Because Iran is important. Mohammed Reza Shah was the leader of OPEC during its early years, and as he was friendly to US interests, he and Saudi Arabia conspired together with those interests to establish an oil distribution system that tied the value of Middle Eastern oil to the United States dollar. No country could purchase oil unless they had dollars; rubles, yen, lira, or pounds were not accepted. Monies had to first be converted to dollars. This was a boon to the US banking industry, and especially to the newly-created Federal Reserve. Instead of having to have gold and silver on hand to meet demands for redemption of gold and silver certificates, the dollars could be backed by the absolute need for oil shared by every developed and developing country across the globe.
In 1934, the United States, in response to the Great Depression, nationalized gold. This act effectively suspended the conversion of dollars for gold, since any citizen demanding conversion was assured of then having his money confiscated. While this did not last forever, it was an interesting experiment in that it proved that obvious monetary backing is less important for those using the currency than faith in the currency itself. When OPEC formed in 1960 and began the dollar-oil peg, movements began to completely remove the gold standard, movements which reached fruition in 1976. The dollar was now assumed to be fiat, although in actuality its strength was backed by the dollar-oil peg.
The foundation for this movement was laid shortly after WWII at the Bretton Woods Meeting. The United States, playing on its status after the devastation of the war left other countries in tatters, came out with the dollar as the International Reserve Currency, which made the dollar-oil peg easier to accomplish later on.
