Following the Suez crisis of 1956, the United Nations Secretary-General Dag Hammarskjöld proposed a regional economic development plan to address inequality among the Arab states. This paper draws on research in U.S. and British archives, UN records, Arabic sources, and Hammarskjöld’s unpublished papers held at the National Library of Sweden to produce the fullest available picture of his plan and its context. The idea was for a regional development fund into which oil companies would pay a percentage of the royalties they owed to Arab oil-producing states. Those states would also advance credits to the fund, which would invest in development projects in the resource-poor and more densely populated Arab countries of the Levant. The paper traces the genesis and development of Hammarskjöld’s plan to the aftermath of the Sinai War, in which the UN and World Bank advised Egyptian leader Gamal Abdel Nasser on the salvaging of the Suez Canal and the establishment of Egypt’s Suez Canal Authority. Like that postwar cooperation, Hammarskjöld conceived of the proposed fund as a way of facilitating Arab economic development within the framework of a rehabilitated Anglo-American petroleum order. Without saying so publicly, the secretary-general also hoped that the fund could assist in resettling significant numbers of the Palestinian refugees who had been driven from their homes in 1948 as part of a negotiated Arab-Israeli peace. Despite intensive efforts to sell his plan to Nasser, Israeli prime minister David Ben Gurion, British foreign secretary Selwyn Lloyd, and U.S. secretary of state John Foster Dulles, Hammarskjöld failed to realize his scheme. He faced opposition from the U.S. and British governments, major oil companies, and the leaders of Arab oil states such as Iraqi prime minister Nuri al-Sa‘id, all of whom feared that Nasser would benefit most from the proposed fund. By assigning supervisory roles over the fund to the UN Secretariat and World Bank, Hammarskjöld also conceived of regional development as a strategy for containing Arab nationalism and reconciling it to the demands of the “free world” oil economy. Nevertheless, Hammarskjöld’s plan represented a missed opportunity, before the establishment of OPEC and the petrodollar bonanza, to address the ways in which oil development fostered staggering inequalities within and between Arab countries. Such structural inequalities persist in today’s Arab Middle East and contribute to poverty, conflicts, and migration.