The Price of Failure

Abstract

This chapter provides critical assessment of Britain’s post-World War I oil strategy and details the strategic consequences of its failure during the early years of World War II. It reveals the irreconcilable dilemma that doomed Britain’s attempts to satisfy its energy needs independently in wartime: a shortage of tankers and foreign exchange. Reducing the foreign exchange burden meant increasing imports from the Middle East, which stretched Britain’s supply of tankers to the breaking point, since there were not enough to redirect imports around the Cape of Good Hope after Italian hostility threatened access through the Mediterranean. Drawing oil from the Western Hemisphere required fewer tankers but also cost foreign exchange. Ultimately, Britain’s survival after 1940—as after 1917—depended upon the assistance of the United States.