The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

In April 1956 Standard Oil of New Jersey commissioned its own study of how to move oil westward from the Persian Gulf if the canal was indeed shut. Around this same time, the British Foreign Secretary, Selwyn Lloyd, visited Nasser in Egypt. As far as Britain was concerned, Lloyd made clear, the canal was “an integral part of the Middle East oil complex, which was vital to Britain.” To this, Nasser replied that the oil-producing countries received 50 percent of the profits from their oil—but Egypt did not get 50 percent of the profits from the canal. If the Suez Canal was an integral part of the oil complex, he declared, then Egypt should have the same fifty-fifty terms as the oil producers. Nothing, however, was done to revise the existing arrangement. At the end of 1955, in an effort to placate Nasser and strengthen the Egyptian economy, the Americans and British, in conjunction with the World Bank, had begun considering a loan to Egypt to build a huge dam at Aswan on the Nile. That project appeared to be going forward. And Nasser was further gratified when, on June 13, 1956, the last British troops were withdrawn from the Canal Zone in accordance with the agreement that Eden had negotiated two years earlier. But Nasser’s arms deals with the Soviet bloc had already alarmed and alienated Washington. It was thought that the Egyptians would mortgage their limited resources to pay for Soviet arms instead of making their contribution to the dam. Moreover, the expected economic...