“Let’s not politicize oil!” How many times have you heard that admonition?
It was first coined in the late 19th century when oil was beginning to emerge as the key lubricant of a modern industrial society. Having started as a new venture by private entrepreneurs, what took shape as the oil industry soon attracted the attention of all major industrial nations. By the early 20th century most of them had set up their national, that is to say state-owned, oil companies, thus making oil political while insisting that it shouldn’t be politicized. (The US alone didn’t and still doesn’t have a state-owned oil company.) From the start, the biography of oil has included another theme: fear of the world running out of oil. In the 1930s a report prepared for the British admiralty warned that oil may become “a scarce resource” within a couple of decades.
The Nazi regime in Germany was gripped by fear of running out of oil and, having seized the Romanian oilfields tried to capture those of Transcaucasia in an operation that led to the Stalingrad disaster for the Reich.
In 1970, the Club of Rome, bringing together Europe’s “top brains”, prophesized that the world will run out of oil by the year 2000. World consumption of oil at that time was around 46 million barrels a day. In 2023, global oil consumption is slated to top 100 million.
In 1995, the then Saudi Oil Minister, Ali al-Naimi, told me in an interview that oil could lose its dominant position within three decades not because of dwindling reserves but as a result of alternative energies being developed.
In 2018 Patrick Deneen of George Town University in Washington DC wrote a whole book, “Why Liberalism Failed”, claiming that as the world was running out of oil the Western liberal societies faced an existential threat.
Another cliché current in big chancelleries was that the ideal oil producing country is one with a small population and big reserves of oil.
Needless to say, none of those shibboleths have been proven right. Oil was and remains political, or at least geopolitical.
The world isn’t running out of oil and alternative energies remain more of a promise than the basis for what Deneen says should be “a post-liberal system.” The balance between an oil producing nation’s population and its oil exports has also seen radical change.
Iran started exporting oil in 1908 when it had a population of nine million, but now has a population of 90 million. Other oil producing nations such as Mexico, Indonesia, Venezuela and Nigeria have quadrupled their populations.
In 2021 the world’s largest producers of oil were the United States and Russia neither of which could be regarded as demographic midgets.
That oil is a tool of international politics has been illustrated on a number of occasions.
In 1951 Iran nationalized its oil but refused to offer compensation to the British company that exploited it, triggering four years of crisis the consequences of which haunted Iranians for seven decades.
Then there was the “oil shock” of 1973 followed by attempts at bringing Apartheid South Africa to its need by denying it oil.
The sanctions imposed by US President Donald Trump on Iranian oil trade was also a clearly political move and succeeded in briefly restraining the Islamic Republic’s adventurist fantasies. President Joe Biden’s decision to ignore those sanctions and allow the Islamic Republic to sell as much oil as it could produce, mostly to China and India but also on the so-called “brown market” was also political and aimed at reviving the Obama “nuke deal” with Tehran.
The latest use of oil as a political weapon has come with the embargo imposed by Western powers on Russia. This time, too, the politicization of oil has led to unintended, but no less political, consequences. Russia is forced to sell its oil to China at a sweetheart price that helps the Chinese economy avoid the recession that pundits predicted. India, too, is benefiting from cheap Russian oil by cutting its energy costs while also making a killing by selling part of that same oil to Europeans at real market prices.
At one point during the 1990s, in the aftermath of the collapse of the Soviet Empire and with Pollyannaish talks about “peace dividends”, the World Economic Forum crowd in Davos mused about treating oil as “something that belongs to all humanity as is the air we breathe.”
That, too, was political talk-albeit empty talk.
The latest attempt at using oil, or its “impending end”, for political reasons comes again from the theorist Deneen in a new book entitled “Regime Change: Towards a post-Liberal Path.”
The implied assumption is that liberal systems cannot prosper, or even survive, without cheap oil. The current leadership elite in Western democracies, most n notably in the United States, is made of mediocre individuals who lord it over the nation thanks to prosperity secured by cheap oil and innovations made by gifted people operating on their own. Thus, there is a disconnect between the few that control the government, and thanks to their power, a big chunk of the national economy, and the many who end up paying the price of errors made by the few.
The question of the relations between the few and the many has been a hot topic in political thought since Plato, who advocated a system in which philosophers, that is to say, the few by definition, would hold power. Political theorists in the Roman Empire developed a similar argument to show that Patricians must lord it over plebeians.
In Leninism, the Proletariat represented by its “party of the vanguard” acts as the few that lead the many. In Khomeinism, the ideology of the current system in Iran, the few is further summed up in the person of the “Supreme Guide”. In a recent speech Ayatollah Ali Khamenei said that “ordinary people”, that is to say the man, cannot decide important issue.
Deneen suggests the “creation of a new self-conscious elite” whom he calls the “aristoi” to shepherd the “ordinary people” who, lacking in knowledge and imagination, want nothing but stability and the assurance of relying on a strong authority.
In other words, we need authoritarian, if not autocratic, governments that can do away with the trials and tribulation of democracy and ensure good living standards for their people- especially if we run out of oil.
