Adam Hanieh is a Professor of Political Economy. His latest book, Crude Capitalism, aims to help us understand the nature of the fossil fuel economy, which he considers essential for addressing the climate crisis. The Mint caught up with him and received a fascinating account of capitalism, colonialism, and conflict.

Key points

Rise and Dominance of Western Oil Companies

• Seven major Western firms (5 American, 2 European) controlled the global oil industry for most of the 20th century
• Vertically integrated, controlling extraction, refining, shipping, marketing and sales
• Controlled key infrastructure like pipelines and refineries
• European companies leveraged colonial links, especially in the Middle East
• US government supported growth through infrastructure and military consumption

Emergence of National Oil Companies

• Anti-colonial movements in the Global South sought control of natural resources post-WWII
• OPEC established in 1960 to represent oil-exporting countries
• National oil companies took control of upstream reserves
• Western companies lost direct ownership but maintained downstream control
• Authoritarian regimes in oil-producing states made deals with Western powers for support

Shifting Dynamics in the Modern Oil Industry

• National oil companies have become vertically integrated like Western predecessors
• Major shift towards supplying East Asia, especially China, forming an “East-East” oil circuit
• Western companies still dominate in North America/Europe, focusing on offshore and shale oil
• Oil companies explicitly committed to maximizing production despite climate change
• Petrochemicals seen as “future of oil” by the industry

Climate Change and Government Action

• Recent climate summits have made little progress on controlling fossil fuels
• Oil-producing states actively work to obstruct climate policy
• Even as renewables expand, overall fossil fuel consumption continues to increase
• Oil-producing regions like the Gulf facing accelerated climate impacts

Recommendations for Climate Action

• Book aims to highlight oil’s pervasive role in all aspects of modern life
• Systemic change needed, not just technical solutions
• Change must come through social/political movements, not current governments or energy producers