OPINION: The New Mexico roots of the American-Iranian oil entanglement

For the American oil industry, the outbreak of war in Iran constitutes the most consequential conflict in half a century. When we look at the relationship between America and Iran — one of the five nations that helped form OPEC in 1960 — over the past century, it resembles a love-hate relationship instead of a true rivalry.

The seeds of that relationship were planted in New Mexico nearly a century ago.

Amid an economic crisis — which included a stock market crash, sagging crop and livestock prices, and the first peacetime oil bust in American history — Franklin Delano Roosevelt rode to power in the 1932 presidential election. He sold the American people on the idea that cutting oil, crop and livestock inventories could help raise prices — and that taxpayer-funded programs alone could lift the country out of poverty.

He was not alone in his thinking. FDR had many disciples. Clyde Tingley, New Mexico’s two-term governor (1935-39), was one of them.

Tingley is often considered a hero in New Mexico politics, but his energy policy put New Mexico behind the eight-ball for decades.

Tingley followed the same playbook as FDR in terms of cutting oil. As New Mexico’s governor, he chaired the New Mexico Oil Conservation Commission, which had the final say over drilling permits on state-owned lands. Tingley supported federal mandates that cut New Mexico’s daily oil output to 55,000 barrels per day, or by roughly half.

Tingley’s support for federal oil production limits ran into trouble, however. Even those who supported cuts to oil production disagreed with the idea that the federal government should have the final — indeed, the only — say as to daily production limits. The rift was evident in Santa Fe. Hiram Dow, who won election to the lieutenant governor’s seat as Tingley’s running mate in 1937, would help form the Interstate Oil Conservation Compact in 1935. This was a loose confederation of officials from several oil-producing states — including New Mexico — who sought to allow state regulators to determine daily production limits. In other words, the IOCC proposed that officials in Santa Fe — not Washington — determine how much oil could come from Lea County each day. (It should be noted that New Mexico oil production averaged about 38 million barrels each year from 1937-45, with almost all of that oil coming from Lea County fields. But that total still lagged far behind the amounts of oil coming from Texas oil fields, which hovered close to the half-a-billion-barrel mark.)

The infighting between the NMOCC and the IOCC would not undercut Tingley’s popularity.

As of 2026, only five Republicans have won gubernatorial races in New Mexico since Tingley left office in 1939. His popularity with New Mexicans ensured that the Democratic Party could enjoy robust successes at the ballot boxes thanks to decades’ worth of Tingley’s coattails.

But Tingley’s policies would prompt oilmen to look outside of New Mexico for drilling prospects. In fact, negotiating oil deals in Saudi Arabia and Iran would become more feasible than negotiating oil deals in New Mexico by the end of the 1930s. The first discovery of oil in Saudi Arabia came in 1938. In 1947, four oil companies — Exxon, Mobil, Texaco and Chevron — pooled some of their resources to form the Arabian-American Oil Company. In 1954, and until October 1979, Exxon, Mobil, Texaco, Chevron, Gulf, Shell, British Petroleum and Total formed a consortium that split all of Iran’s oil revenues with the regime of the Iranian shah.

For all intents and purposes, the divide between America and Iran is a divide between government and business — a divide that took shape in the days of Clyde Tingley.

Matthew Day is an independent scholar/historian from Lubbock, Texas.  He is the author of 30 books, including “Lubbock, Levelland, Baghdad, Washington; The Oil Empire That Wasn't Book I,” and “The Oil Empire That Wasn't Book II.”  He also writes a column for the Seminole (Texas) Sentinel.  His website is matthew-m-day-books.mailerpage.io.