Oil, imperialism and the struggle for ecosocialism
By Susan Price
Crude Capitalism: Oil, Corporate Power, and the Making of the World Market
By Adam Hanieh
Verso, 2024
Adam Hanieh, is a professor of political economy and global development at the University of Exeter’s Institute of Arab and Islamic Studies and the author of a new book, Crude Capitalism: Oil, Corporate Power, and the Making of the World Market.
Hanieh told a Global Ecosocialist Network meeting in late October that he was inspired to write Crude Capitalism because so much writing about oil adopts what he terms “commodity fetishism” – where the story of oil is divorced from capitalism and capitalist social relations.
So he sought to “think about what it is about the various logics of capitalism that give oil its apparent power”, for example, the “tendency towards endless accumulation of capital, the speeding up of turnover time of capital, [and] mechanisation”, which “often get left out of the broader story of oil”.
Hanieh aimed to link this story to the history of the 20th century, particularly the rise of the United States through the post World War II period, to today, when US hegemony is under threat from competing capitalist powers.
Importantly, Hanieh’s book isn’t limited to studying oil as a liquid fuel, but “what oil becomes as it circulates within capitalism” as a transport fuel, energy source and as petrochemicals, as well as its connections to food, financial systems and its centrality to the US dollar as the dominant global currency.
Speaking about his book, Hanieh focused on four key areas:
First, he discussed the question of petrochemicals and the “synthetic world”, including plastics, which have now become central to capitalist production. This was a result of a major shift in capitalism after WWII, where natural products were replaced by synthetic materials and substances, including fertilisers.
“This synthetic turn within capitalism was crucial to centering oil as the dominant fossil fuel,” Hanieh said. Because it turned the waste product of refining oil into “feedstock” for a whole range of different industries, in particular the plastics industry.
This enabled “endless kinds of accumulation” of capital. “The whole phenomenon of ‘fast fashion’ today is based upon synthetic fibres, the byproducts of petroleum [and in the book] I talk about all the ways all these things really centred oil in our lives, but at the same time made oil invisible.
“There’s a lot of discussion about micro-plastics and toxic waste and recycling and so forth, but it actually helps us to reframe this question of plastics as a question of fossil fuel production. We cannot break with oil and other fossil fuels without thinking about plastics. Because it is clear the oil industry are openly saying that plastics are the future of oil. There are various assessments about a tripling in plastics production in the next couple of decades and plastics becoming the central demand for oil over the next decade or so.”
Secondly, Hanieh spoke to the rise of national oil companies (NOCs) and a shift in the world oil industry over the past decade or so: particularly the rise of the Middle East and China/East Asian NOCs and what their impact is on global climate policy.
Hanieh’s research shows a huge rise in Chinese oil imports over the past 23 years. China’s share of world oil imports was about 20% last year, up from about 4% in 2000. Meanwhile, the US and Europe have gone from being the world’s major importers of oil to being surpassed by China.
“Obviously this is connected to the rise of China as a major centre of capital accumulation and a major manufacturing centre, but it has really shifted the way that the oil trade happens, because most of China’s oil imports come from the Middle East — from the Gulf oil producers — in particular Saudi Arabia the UAE [United Arab Emirates] and other major petro-states.
“So we have the emergence of an East-East hydrocarbon axis, with much closer interdependencies forming between the Gulf states, on one side, and China/East Asia on the other. These interdependencies are not just in the export of crude oil … but in downstream sectors such as refining and in the petrochemical sector.”
Hanieh’s analysis of global oil refining capacity shows that in 2001 North America and Europe had the dominant share of refining capacity, However, by 2023, China, Japan, South Korea and Singapore more than doubled their combined refining capacity from 12.5% to 25.6%, surpassing North America (21.2%) and Europe (14.4%). The only other area of the world that has raised its capacity is the Middle East – which may now have surpassed Europe’s.
Similar patterns can be seen in the global trade in plastics, according to Hanieh’s research, where China imported US$24.9 billion worth of petroleum-based polymers (propylene and ethylene) in 2023, and where the Gulf Cooperation Council (GCC, headed by Saudi Arabia) accounted for 26% of China’s imports of the polymers of ethylene and 18% of its imports of polymers of propylene.
“What this illustrates is that a very important shift that has taken place in NOCs over the last decade or so, where they have followed the same pattern the big Western oil companies did through the 20th Century.
“Companies like BP, Shell, ExxonMobil and Chevron … they own crude oil but they also process … and control the refining of the oil, they control the shipping … they control the retail outlets, the service stations where petrol and other products are sold, they control the petrochemical industry and they control the marketing of oil.
“What has happened in the last decade is that these large NOCs — in particular Saudi Aramco, which is the biggest oil company in the world now — have similarly followed this vertical integration and downstream diversification away from simply crude oil. So [Saudi Aramco] is now one of the major petrochemical producers, it holds a huge refining capacity, it runs shipping lines, tankers and so forth.
Hanieh emphasised that Western oil companies are still crucial to the climate debates in North America and Europe, however, “What we are seeing is a diversification of the world oil market and – in some ways – a fracturing into two blocs: On the one hand the North American-South American bloc dominated by the Western “super majors”; and [on the other] this East-East hydrocarbon link [between] the Middle East and East Asia.
“With COP28 held in the UAE and COP29 in Azerbaijan – [the Gulf] states are playing a major role in setting the terms of these policy forums.
“Saudi Aramco posted profits last year exceeded the combined profits of ExxonMobil, BP, Shell, Total Energies and Chevron – the Big 5 Western super majors.”
Hanieh said the “fusion between the power of the big Gulf-based oil firms and the Gulf states, who have a seat at the negotiating table in the COP forum” means “they are able to directly intervene in the policy space in ways that benefit both themselves but also the big Western super majors”.
The interdependencies between the Gulf region and China extend to other major East Asian countries, Hanieh said. In South Korea, for example, S-Oil, which is the second biggest South Korean refining company, is majority owned by Saudi Aramco. Saudi Aramco and other Gulf investors also own joint shares in the biggest privately owned petrochemical companies in China (e.g. Rongsheng Petrochemical, Hengli Petrochemical and Shandong Yulong Petrochemical). These financial flows are deepening across China, South Korea, Malaysia and Japan.
Thirdly, regarding the ongoing centrality of the Middle East to US imperialism, Hanieh said “People have it in their minds that the US is interested in grabbing the oil from Saudi Arabia … or that the US is dependent upon oil from the Middle East, [but] that is definitely not the case.
“The US is the largest oil producer in the world. It doesn’t need oil from the Middle East. It doesn’t import oil from the Middle East in any large quantities.
“However, because of these connections with China we can see the importance of the Middle East region to the way that US power operates globally. If there was ever to be heightened conflict with China, if there was ever going to be an attempt to place sanctions on China, then US dominance and its connections with the major oil producers in the Gulf – particularly Saudi Arabia – would be a key and decisive factor.”
Within the Middle East, “US power [is] based upon two major pillars – one being the Gulf States (Saudi Arabia and the other Gulf monarchies) and the second is of course Israel, which has played that role within American dominance of the region since the 1967 war”.
“So what we see in this current moment is the US backing of Israel in the region. US strategy has been to knit together and normalise the political and economic connections between these two pillars — between the Gulf states and Israel — [and] it has had some success in doing that, with the normalisation agreements between the UAE and Israel under the Trump administration.
“I think this is clearly the bigger strategy of the American state moving forward, whatever happens after the genocide.”
Finally, on what this means for ecosocialist struggles and strategies, Hanieh said we need to “move away from a very common perspective that the problem is the profits made by big oil producers, and rather, think through the place of oil in global capitalism … [where] oil companies are indeed a huge problem but they are the manifestation of a deeper problem, which is this question of oil’s place in capitalism”.
Under the “rubric of the green transition”, Hanieh sees the need to work against the variety of false solutions and techno fixes being advanced.
He argues that “energy transitions are never substitutions they are always additive. Capitalism tends to increase the throughput of energy, increase the quantity of energy it consumes … This has historically been the case with coal … [which] was about 85% of world energy supply in the early 20th Century. Now it is about 25%, but the world is using more coal than ever before. Similarly, with ‘natural’ gas.
Other false solutions, such as “carbon capture, electric vehicles, biofuels, carbon offsetting and importantly hydrogen” that have “become very dominant in the policy space” are being pushed by the big oil companies in the Gulf.
In terms of what this all means for ecosocialists, Hanieh said that the “basic premise of the ecosocialist argument is that of trying to place the climate within the wider social and political struggles”. He emphasised the need to see the struggle for Palestine as intimately related to the climate struggle and the struggle against US imperialism – “not simply because of the environmental destruction that has occurred but because of the place of the Middle East in the global oil economy” and the centrality of oil to US imperialism.
Originally Published on https://www.greenleft.org.au/content/oil-imperialism-and-struggle-ecosocialism
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