Friday, February 10, 2006

WAR AND THE QUEST FOR OIL PT 2 Japan and United States 1941-5

The Battle for Indonesian Oil

Crude Oil was first extracted from the Dutch East Indies (now Indonesia) in 1885. The industry was subsequently developed by the Royal Dutch / Shell Group growing uninterrupted until the Second World War. With The Netherlands under German occupation, the US and Japan had rivalling intentions of exploiting the resource to serve their individual expanding ambitions. Whilst Japan had already implemented large-scale plans to control East China, the US had already exerted influence in the region having secured Guam and The Philippines at the turn of the century.

As tensions deepened in South East Asia between the two nations the US introduced a crippling oil and scrap iron embargo on Japan. They refused Japan further US oil exports and closed the Panama Canal to Atlantic trade. In a provocative gesture to enforce the embargo the US also moved it’s large Pacific Naval fleet from San Diego to Pearl Harbour in Hawaii. With Japan’s burgeoning Empire heavily dependent on their dwindling oil reserves the government viewed these steps as a threat to the nation's survival. Japan's leaders responded by resolving to seize the resource-rich Dutch territories of Indonesia to avert economic disaster.

Six months after the embargo was implemented the Japanese struck a devastating blow to the US naval fleet in Hawaii. Having temporarily neutralised the US threat Japan proceeded to occupy Indonesia and the oil resources until defeat and submission at the end of the war. The death toll in Japan was of course devastating. Following Japanese withdrawal Indonesia immediately declared independence, sparking further armed conflict when the Dutch attempted to regain control of the region. The United States pressured the Netherlands to surrender and by 1962 had sealed its influence over Indonesian exports under negotiated terms known as the "New York Agreement".