�鶹��ý

Crude Capitalism: Oil, Corporate Power, and the Making of the World Market
By Adam Hanieh
Verso, 2024
336pp

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.

He sought to think 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 links 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 petrochemicals and the “synthetic world”, including plastics, which have now become central to capitalist production. This was due to a major shift in capitalism after WWII, where synthetic materials and substances replaced natural products, including fertilisers.

“This synthetic turn within capitalism was crucial to centring 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, particularly the plastics industry.

This enabled “endless kinds of accumulation” of capital, he said. “The whole phenomenon of ‘fast fashion’ today is based upon synthetic fibres, the byproducts of petroleum … [which] centred oil in our lives, but at the same time made oil invisible.

The discussion about micro-plastics, toxic waste and recycling helps reframe plastics as a question of fossil fuel production, Hanieh said. “We cannot break with oil and other fossil fuels without thinking about plastics.”

Plastics

Plastics production is expected to triple in the next couple of decades and become the central demand for oil, Hanieh said.

Second, Hanieh spoke about the rise of national oil companies (NOCs) and a shift in the world oil industry, particularly the rise of the Middle East and China/East Asian NOCs and their impact 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, China surpassed the US and Europe as the world’s biggest importers of oil.

China’s rise as a major centre of capital accumulation and manufacturing has shifted global oil trading, Hanieh said, because most of China’s oil imports come from the Middle East, in particular Saudi Arabia, the United Arab Emirates and other petro-states.

“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 last year, China, Japan, South Korea and Singapore had 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.

Similar patterns can be seen in the global trade in plastics, according to Hanieh’s research. China imported US$24.9 billion worth of petroleum-based polymers (propylene and ethylene) last year, with the Gulf Cooperation Council (headed by Saudi Arabia) accounting for 26% of China’s imports of the polymers of ethylene and 18% of its imports of polymers of propylene.

NOCs, over the past decade, have followed the same pattern the big Western oil companies did throughout the 20th century, Hanieh said.

Companies like BP, Shell, ExxonMobil and Chevron control all aspects of the petrochemical process, such as refining, shipping and retailing, he said.

“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. [Saudi Aramco] is now one of the major petrochemical producers, it holds a huge refining capacity, it runs shipping lines, tankers and so forth.

Climate debates

Hanieh emphasised that Western oil companies are still crucial to the climate debates in North America and Europe.

Hanieh said that the world oil market has diversified and somewhat fractured into two blocs: the North American-South American bloc dominated by Western “super majors”; and the 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 exceeding 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 that “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 — 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. These financial flows are deepening across China, South Korea, Malaysia and Japan.

Third, regarding the ongoing centrality of the Middle East to US imperialism, Hanieh said that there exists an unfounded belief that the US is interested in seizing oil from Saudi Arabia.

“The US is the largest oil producer in the world. It doesn’t need oil from the Middle East.

“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.”

In the case of heightened conflict with China, US connections with major oil producers in the Gulf would be a “key and decisive factor”, Hanieh said.

US dominance

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”.

The US’ strategy to normalise the political and economic connections between the Gulf states and Israel has had some success, Hanieh said, such as the normalisation agreements between the UAE and Israel under the Donald Trump administration.

Finally, Hanieh said that ecosocialists need to move away from the common perspective that the core problem is the “profits made by big oil producers”. He said oil companies are a “huge problem”, but merely the “manifestation of a deeper problem”, which is “oil’s place in capitalism”.

Hanieh said we must resist the false solutions and techno-fixes being advanced under the “rubric of the green transition”.

He argued 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 hydrogen” have “become very dominant in the policy space” and are being pushed by the big oil companies in the Gulf.

In terms of what this 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.