How Margaret Thatcher Changed Iraq, the USSR, and the Oil Industry

Margaret Thatcher, who died today at the age of 87, is famous for admonishing US President George H.W. Bush not to “go wobbly” on Iraq after it invaded Kuwait in 1990. She was widely thought (including by Colin Powell, the chairman of the Joint Chiefs of Staff) to have influenced Bush’s resolve. Bush suggested later that he had no intention of going wobbly absent Thatcher’s push—but the outcome was the Gulf War, and ultimately Saddam Hussein’s ouster a little over a decade later.

Thatcher had an exceptionally broad foreign policy impact, on big and smaller topics, as Great Britain’s prime minister. Much could be different were it not for her place on the global stage. 

It was Thatcher’s imprimatur in 1984—telling the world that Mikhail Gorbachev was someone with whom “we can do business together”—that made it safe to embrace the idea of a transformed Soviet Union. At the time, US President Ronald Reagan was saying the opposite—talking of a continued “evil empire.” But Thatcher’s warmth toward Gorbachev (whom she frankly told “I hate Communism”) changed the conversation. Starting a year later when he became the Soviet leader, the West championed his ideas of glasnost and perestroika. Reagan went along with her. 

Less well known is Thatcher’s importance to Azerbaijan. As the Soviet Union was falling apart, Thatcher, by then invested in Gorbachev’s success, summoned BP exploration chief John Browne, as I discovered while writing a book about the period. She asked Browne to go do a big oil deal in the Soviet Union—it would help Gorbachev, she said, by getting him an accelerated flow of foreign currency.

As it happened, Browne, like the executives of most of the world’s big oil companies, was already nosing around the Soviet Union, especially Kazakhstan. But after hearing from Thatcher, Browne summoned his BP team and pushed them harder to get a deal. 

The result was among the largest oil deals of the period—the giant, BP-led offshore Azerbaijan oil production agreement that for the last seven years has pumped hundreds of thousands of barrels of oil a day through a 1,000-mile-long pipeline to the Turkish Mediterranean. That deal might have happened without Thatcher. But it may not have happened as fast, or with BP.

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