Fueling Capitalism: Oil, Empire, and the Global Economy
An Interview with Adam Hanieh
May 16, 2025
IN HIS IMPORTANT NEW BOOK Crude Capitalism, published late last year by Verso, political economist Adam Hanieh demonstrates just how central oil is to life under modern capitalism. While we typically understand fossil fuel narrowly as an energy source, Hanieh reveals that the extent of oil’s entrenchment far exceeds anything we might have imagined. In a wide-ranging discussion with Spectre’s Zachary Levenson, he discusses the relationship between Western oil companies and the rise of neoliberalism, the advent of dollar hegemony, the cooptation of anticolonial self-determination struggles, and the US motives for seemingly boundless support of Zionism.
I wanted to start with a very broad question about an impressively broad book. Crude Capitalism does a brilliant job establishing the origins and genesis of big oil. It also presents a nuanced view of the rise of Middle Eastern countries in the sector, taking great care to tell this story in relation to Euro-American imperialism. Could you briefly rehearse your argument about the significance of Middle Eastern oil to contemporary capitalism? When did the region become so central and why?
The Middle East played a pivotal part in the rise of an oil-centered capitalism across the twentieth century. After the breakup of the Ottoman Empire in the wake of the First World War, control of the region was divided up between European colonial powers, primarily Britain and France. The region’s cheap and relatively accessible oil reserves were managed by European oil firms, which paid a small royalty to local rulers.
At this stage, American oil firms did not have a major presence in the region—they were excluded by the European powers. Although oil was not yet the leading fossil fuel globally, it was becoming increasingly important, especially to the waging of war. In 1914, for instance, Winston Churchill had explicitly identified Iran’s oil reserves as a strategic asset essential to shifting the British navy from coal- to oil-fired ships. At the time, oil extraction and refining in Iran was run by the Anglo-Persian Oil Company, a firm owned by the British government. Today we know that firm as BP.
Around the time of the Second World War, the global energy system shifted definitively from coal to oil as the primary fossil fuel (although this didn’t mean a fall in the consumption of coal). This energy transition was pushed forward by the US and was closely linked to the emergence of the US as the leading capitalist power, supplanting Western European states that had been tremendously weakened by the war and the anticolonial revolutions across the world.
The Middle East was an essential part to the restructuring of global capitalism in this postwar period, because the region’s low-cost oil could be easily shipped to Western Europe without creating extra demand for American oil. In fact, the Marshall Plan specifically forbade the import of US oil—and more Marshall Plan aid was spent on oil than any other commodity.
In this sense, the postwar coal-to-oil transition in Western Europe was as much a Middle Eastern phenomenon as it was European. But the two interlinked transitions occurring in this period—from coal to oil and from European to American global dominance—took place alongside the crumbling of the old European-controlled order in the Middle East.
It was in this context that the US sought to replace European colonial rule as the major foreign power in the region. This was especially important because of the strength of various Arab nationalist and anticolonial forces (such as Nasserism in Egypt) and the calls by these movements to nationalize oil and other resources.
Amidst these struggles, the US alliance with Saudi Arabia emerged as a critical pillar of American presence in the region. Through the 1940s and 1950s, American oil firms had come to fully control Saudi oil production. Saudi Arabia, however, was not immune from radical, left-wing movements and labor agitation, and there was even a Nasserist current within the Saudi ruling family.
Faced with these challenges, the US gave unqualified support to a conservative faction of the Saudi monarchy and sought to incorporate it into a US-centered regional and global order. Of course, the second major pillar of American power in the region was Israel—especially after the 1967 war in which Israel militarily defeated Egypt and a number of other Arab states, dealing a major blow to pan-Arabism and other radical political currents in the region.
But the Middle East was not important simply because of the physical crude oil it supplied to international markets. Crude exports meant large quantities of financial surpluses were earned by governments in the region, especially after the nationalization of oil and the oil price rises of the 1970s. These financial surpluses—dubbed “petrodollars”—were really important to the formation of the contemporary financial system, centered around the US dollar and Euro-American financial institutions.
The US went to a great deal of effort to make sure that the oil was priced in US dollars and that Gulf petrodollars were recirculated into the US through the purchase of Treasury bonds and other US securities, as well as through the sale of military hardware and other kinds of investments.
We tend to think about crude capital as producing a liquid commodity that appears at our gas stations. I was surprised in reading your book about just how much of this sector has absolutely nothing to do with petroleum or natural gas—the obvious case being plastics and petrochemicals. Can you give us a sense of how significant petroleum byproducts are to the industry as a whole, both in terms of profitability and its political influence?
I spend quite a bit of time in the book exploring petrochemicals and their implications for how we approach the relationship between oil and capitalism. The development of this industry took off in the mid-twentieth century after the Second World War—it was a key part of the wider coal-to-oil transition at this time.
What this meant was the substitution of a whole range of naturally occurring substances—things like wood, cotton, glass, natural rubber, and so forth—with synthetic products derived from oil (and later natural gas). We tend not to think about the significance of this synthetic turn today. It has become normalized within our everyday consciousness.
The petrochemical revolution really deepened the power and reach of the oil industry, especially that of American oil firms. Crude oil became a substance that wasn’t simply used as a liquid transport fuel or for lighting (in the form of kerosene) but also as the material substrate of almost all commodity production. Petrochemical production turned what was essentially a byproduct of the fuel refinery process into a useful product.
Oil—and the oil industry—became centered in our lives. This was largely an American-led process, because the US petrochemical industry had utilized oil as the primary feedstock, rather than coal, which had been the favored feedstock of the much larger German chemical industry in the first half of the twentieth century. In pushing forward the shift to oil, the US consciously dismantled the German coal-based industry after the Second World War (and also appropriated a lot of German technical skills in the wake of the war).
Petrochemicals marked a major revolution in the material forms of commodity production under capitalism.
Petrochemicals marked a major revolution in the material forms of commodity production under capitalism. No longer tethered to natural cycles, the volume and variety of commodities could expand dramatically. There was also a sharp reduction in the labor time required to produce commodities, which was further propelled by the invention of injection-moulding machines and their use on assembly lines in the 1950s and 1960s.
The automated fabrication of cheaply reproducible components derived from petroleum served to transform whole branches of industrial production. Petrochemicals, in other words, allowed the deeper logics of capitalism to express themselves: the expansion of commodity production, proliferation of new commodities, mechanization, the speeding up of the turnover time of capital, and so forth.
Our subjectivities also shifted alongside these changes to production, with consumption habits increasingly centered around notions of disposability and obsolescence. We’re of course living with the consequences of this synthetic turn today, with the proliferation of toxic waste such as microplastics in our bodies and the wider biosphere.
All of this made oil invisible within our daily lives. The very ubiquity of petrochemicals and plastics makes it hard for us to recognise their pervasive presence throughout society. We tend to normalize them as “natural” because they are everywhere. This is the paradox we currently face.
I think to confront this paradox we must really learn to “see” petrochemicals—and to recognize that the emergence of a synthetic world is relatively recent, taking hold only in the middle of the twentieth century. We need to understand petrochemicals in relation to the underlying logics of capitalism, not simply as material substances.
Additionally, one of the things I try to do in the book is trace the emergence of new sites of petrochemical production and consumption today. The industry is no longer primarily American- and European-centered; we’ve seen a massive rise in the production of petrochemicals by producers in the Gulf countries of the Middle East, China, and wider East Asia. Saudi Aramco—the biggest oil company in the world—is also one of the world’s largest petrochemical producers, and it is targeting a much bigger proportion of every barrel it produces to go to chemicals. Aramco is currently building a huge oil-to-chemicals refinery in Saudi Arabia, which aims to turn around 40 percent of each barrel of oil into chemicals.
So, we can see how significant petrochemicals are to the oil industry moving forward. Today, the International Energy Agency estimates that petrochemicals will make up the largest growth in demand for oil over the next two decades—a fact well recognized by the fossil fuel companies who openly call them “the future of oil.”
This is why we need to reframe the question of plastics as not just an issue of pollution and chemical toxicity but as a key driving force of a fossil fuel-based economy. Indeed, this is why Saudi Arabia led the charge against a global plastics treaty during an international meeting convened in Busan, South Korea, last November.
The conference was supposed to adopt a treaty limiting plastics production, but instead it collapsed. The line pushed by Aramco and other big oil companies at that summit was that “the problem is pollution not production.” It’s a standpoint that perfectly captures capitalism’s separation of the sphere of production from consumption and really points to why we can’t deal with the devastating consequences of plastics without a critique of capitalism.
I found your revisionist account of the 1973 OPEC embargo incredibly compelling. We often hear about the embargo in the standard origin story of neoliberalism, a story that goes something like this: Arab governments manipulated price controls, intervening in an otherwise free market, and so the removal of price controls comes to be seen as a solution, essentially manufacturing consent for the neoliberal turn.1For one version of this account, see chapter 4 in Matt Huber, Lifeblood: Oil, Freedom, and the Forces of Capital (Oxford: Oxford University Press, 2013). But you suggest that there was an oil shortage prior to the embargo itself, and that “the embargo can be read as little more than a performative act.”2Adam Hanieh, Crude Capitalism: Oil, Corporate Power, and the Making of the World Market (New York: Verso, 2024), 174. It made me wonder how you see the relationship between the embargo—the broader story of the rise of national oil companies in non-Western countries—and the neoliberal turn in US policy in this moment. Could you rehearse the argument about OPEC that you develop in your book for our readers and then discuss the extent to which you think this figures into the birth of neoliberalism?
OPEC was established in 1960 by five major oil producing countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. At the time, its founders did not fully control the huge oil reserves that lay within their own borders. Instead, the extraction, refining, and marketing of almost all the world’s oil was dominated by seven American and European oil companies, popularly known as the “Seven Sisters.”
These firms were the forerunners of today’s largest Western oil giants, such as ExxonMobil, Chevron, Shell, and BP. From the oil field to the petrol pump, these Western firms controlled the global extraction of oil—including in OPEC member states—which they then shipped and turned into refined products that were sold to the final consumer (overwhelmingly located in Western markets). Crucially, the Seven Sisters also set the price of crude oil, paying minimal royalties to OPEC governments for the right to access and extract their oil.
It’s so important to foreground these structural features of the oil industry when thinking about what happened in the 1970s. A common myth persists that the 1970s oil price spikes were caused by an OPEC-led oil embargo against Western states who supported Israel’s occupation of Palestinian lands.
This is false. While there was a short-lived embargo against the US and the Netherlands, this was not an OPEC-wide action; rather, it was conducted by a limited number of Arab oil producers. The Arab embargo was largely ineffectual, because real power still lay with the Seven Sisters who controlled oil shipping, global refining, and the marketing of oil products.
These firms redirected oil from around the world to manage any shortfalls, and as a result, major Western states never faced any real shortages of crude oil. The price rises and product rationing experienced by Western consumers during the 1970s were a consequence of decisions made by the Seven Sisters, not OPEC.
I describe the embargo as a “performative act” because I think it says a lot about the changes going on in the Middle East at the time. We need to remember that the 1960s and 1970s was a period of profound revolutionary upheaval globally and across the region—from Egypt, Palestine, Dhofar, through to Iran.
There was a sense that the region’s huge oil wealth should be used for the good of the people, not to line the pockets of Western oil firms. OPEC was partly an expression of this “Third Worldism,” in that it was an attempt by big producer countries to claw back control of their resources (as well as the pricing of oil). But the formation of OPEC was also—and this is the key point I make in the book—simultaneously an expression against the anticolonial and revolutionary movements.
The embargo was an attempt by the Saudi (and other Gulf) monarchies to project a message of “We stand with Palestine and the people of the region.” But in reality, this was the moment in which the Gulf monarchies (and until 1979, the Pahlavi monarchy in Iran) were incorporated into a US-dominated global capitalism, agreeing to recirculate oil wealth into US financial markets, price oil solely in US dollars, and guarantee that oil was not used as a “weapon.” So, it was a profoundly antirevolutionary moment.
In the US and Western Europe, this was a formative time in the emergence of neoliberal ideology. Basically, the oil crises of the 1970s were framed as a problem of too much state regulation and the deadening hand of government bureaucrats on capitalist markets. It is fascinating how so many of the early ideologues of deregulation and monetarism—people like Milton Friedman, Alan Greenspan, William E. Simon (Nixon’s Secretary of the Treasury), and the future Enron CEO Kenneth Lay—began to articulate a coherent ideological project through an explanation of (and proposed solutions to) the energy crisis. The same was true in Britain.
It’s also often forgotten what happened in the aftermath of the 1970s crises. From the early 1980s onward, there was a shift in how oil was priced—away from the price being set by the producers (whether Western oil firms or OPEC) toward a market-based system of pricing. This new pricing mechanism was consolidated by the mid-1980s and continues through to today. Under this system, the trading of oil futures on financial markets determines the price of oil.
This means that the market price of oil is substantially autonomous—although not separate—from the physical production and consumption of oil. This link between oil and financial markets played a big part in the emergence of what is often described as “financialization,” which I discuss in some detail in the book.
Beyond the embargo, we’re typically presented with a narrative about the rise of oil-producing Arab states over the 1970s. David Harvey discusses the embargo as placing “vast amounts of financial power at the disposal of the oil-producing states.”3David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2006), 27. But your account complicates this narrative. Harvey’s “financial power,” you suggest, turns out to shore up a “new architecture of global finance,” entrenching “the primacy of the American state and the US dollar.”4Hanieh, Crude Capitalism, 181. I’m wondering how much you think this sequence of events was the consequence of a deliberate strategy, as Peter Gowan argues, or whether it only appears as a coherent strategy after the fact.5Peter Gowan, The Global Gamble: Washington’s Faustian Bid for World Dominance (New York: Verso, 1999). What role did the recycling of petrodollars play in the rise of dollar hegemony, and how did this relationship between Arab states flush with cash and Wall Street come into being in the 1970s?
The big picture background to the 1970s was a generalized global capitalist crisis that came at the end of the long postwar boom. This was a systemic crisis—an expression of stagnant profit rates and problems of overaccumulation; it was not caused by the oil price spikes or any specific policies. US policy makers were responding to the manifestations of this crisis—they were operating, to paraphrase Marx, in circumstances not of their own choosing.
This was a systemic crisis—an expression of stagnant profit rates and overaccumulation; it was not caused by oil price spikes.
Oil was key to how this moment of crisis was resolved at several different levels. On one hand, the postwar period had seen the rise of an oil-centered capitalism, with the definitive shift from coal to oil as the principal fossil fuel taking place around the middle of the twentieth century. This shift meant a big increase in the demand for oil globally, and the associated changes in technologies and material production that we spoke about earlier.
At the same time, there was also a reorganization of capitalism at the world scale, which was centered around the “multinational firm” and much more internationalized circuits of production and consumption. These forms of internationalization demanded deeper and more extensive financial markets in which banks and corporations could borrow and deal in currencies different from their domestic markets.
Most important here was the rise of the “Eurodollar” trade in the City of London, where dollar-denominated transactions (such as loans, bond issuance, and deposits) could take place outside the US itself. The integration of the financial surpluses associated with oil into these markets were essential to how this new global financial architecture emerged. Loans of this surplus money capital—superintended by Euro-American financial institutions—played a big part in the subsequent “Third World” debt crisis, and the rise of institutions such as the World Bank and International Monetary Fund.
Underpinning all these changes to the capitalist world market was the consolidation of the United States as the dominant economic and political power in the postwar period, eclipsing Western Europe. In this position, the US drove forward the transition to oil and also had to deal with the aftermath of decolonization and struggles for independence in the former colonized world.
The US relationship with Saudi Arabia and the other Gulf monarchies was essential to how this unfolded. The US support to the Saudi monarchy guaranteed that the control of oil would not be used to radically upset the global political system. And crucially, the Saudis also agreed that oil would be priced in US dollars (up until the mid-1970s, around 20 percent of international oil transactions were conducted in Sterling). This helped cement the US dollar as the international reserve currency because all countries were forced to hold large quantities of dollars to fund their imports of the world’s most important commodity.
For the US, it also meant that the international demand for dollars exceeded any domestic needs, so the US could spend more abroad than it earned with less concern about inflationary or exchange rate worries that constrained the spending policies of other countries. And with the dollar functioning as “world money,” the US gained huge leverage over other states through the threat of sanctions or exclusion from the US banking system. We can see these realities today.
One part to this relationship with Saudi Arabia and the other Gulf monarchies that often gets left out is the distinctive racialized class structures in these states. Unlike anywhere else in the world, capitalism in the Gulf rests upon a majority labor force of heavily exploited temporary migrant workers who lack all political and labor rights and any route to permanent residency or citizenship.
At any sign of protest or labor agitation—or at moments of economic crisis, like the 2008 global crash—these workers can be simply deported to their nearby countries of origin in regions such as South Asia, East Africa, or the Middle East. This particular class structure militates against the possibility of labor organizing or large working-class movements because it tends to bind the small citizen population to the Gulf’s ruling classes and set them against noncitizen workers in ways that are highly racialized.
The shift to this kind of migrant labor structure was one reason why there was a decline of left-wing movements in the Gulf during the 1970s (unlike other major oil-producing countries in the region, like Iraq and Iran). I think this is one reason why questions of race and noncitizen labor—in the Gulf and across the wider region—are so important to any vision of effective working-class solidarity in the Middle East.
The US relationship with Saudi Arabia cannot be separated from this distinctive class structure. This relationship allowed the United States to navigate the crisis that followed the end of the postwar boom—to reorder the world market in ways that supported the power of American capitalism and the global primacy of the American state. All of this shows how we need to think about oil as much more than a physical energy resource.
The circulation of the Gulf’s oil wealth was deeply embedded in the emergence of our contemporary financial architecture, the rise of a US-centered world order, as well as neoliberal orthodoxy and the power of Western financial institutions. The Gulf states were constitutive of this global order, not simply its passive recipients.
My previous question implies the beginnings of a certain geopolitical relationship, a potential alliance between oil sheikdoms and the United States. What is the relationship between the recycling of petrodollars and the seemingly inexplicable alliance between the United States and Saudi Arabia that has persisted for decades? I’m especially interested in how you see more contemporary developments like the Abraham Accords growing out of this earlier moment.
The recycling of petrodollars remains a crucially important part of global financial markets. In 2024, four out of the top ten sovereign wealth funds in the world were headquartered in the Gulf, holding between them assets worth more than $3.5 trillion. On top of that we need to add other state-owned funds in the Gulf, government spending, and the huge levels of privately held wealth in the Gulf.
Historically, much of these financial surpluses flowed into US and Western European financial markets through things like weapons sales, foreign investment, and purchases of equities and government bonds. That’s still important: excluding offshore financial centers, total holdings of US treasuries by the Gulf monarchies ranks fourth in the world, behind China, Japan, and Belgium (as of 2023). And between 2019 to 2023, more than one-fifth of global arms imports went to the Gulf, and the Gulf bought around one-third of all US arms exports.
But there has also been a relative geographic shift in Gulf capital flows over the last two decades. On one hand, from the early 2000s, substantial Gulf investments flowed into countries across the Middle East and the African continent. This was facilitated through the liberalization of economies that came with structural adjustment packages through the early 2000s.
Gulf capitalists—both state- and private-owned entities—were major beneficiaries of the sell-off of state-owned assets and the opening to foreign direct investments. As a result, Gulf capital became deeply inserted in the class and state structures of the wider region. This was a very important factor in the popular uprisings that spread across the Middle East from 2011 onwards.
The other dynamic that is important to note is the eastward shift in the Gulf’s oil exports through the 2000s. This was closely associated with the emergence of China and wider East Asia as key centers of global manufacturing and production. China’s rise created a boom in the global demand for energy, with the world’s annual oil consumption increasing by around 30 percent between 2000 and 2019.
In 2000, China accounted for just 6 percent of world oil demand; by 2019, the country was consuming around 14 percent of the world’s oil, more than anywhere else except the US. Most of these oil imports come from the Middle East; so, there’s been a historic shift in the region’s oil exports away from Western markets towards China and East Asia.
While there is no imminent prospect of any external power replacing the American role in the region, US dominance is increasingly contested.
This eastward geographical shift is one indication of a relative weakening of American power in the Middle East—a trend also reflected in a range of political and economic agreements between the Gulf states and China, and the growing involvement of China and Russia in the politics of the Middle East. While there is no imminent prospect of any external power replacing the American role in the region, US dominance is increasingly contested.
The Abraham Accords must be understood within this context. Signed in 2020, the accords saw the United Arab Emirates and Bahrain normalize relations with Israel, laying the groundwork for a UAE–Israel free trade agreement in 2022—the first such deal between Israel and an Arab state. This rapprochement would not have been possible without Saudi approval, even though Riyadh remains officially outside the framework for now.
As a US-led initiative, the Abraham Accords form a key part of the US strategy to consolidate its two historic pillars of influence in the Middle East: Israel and the Gulf states. Through these agreements, the US aims to reaffirm its regional dominance in the face of its relative decline and the growing economic shifts toward the East. This is even more important in light of deepening global tensions: the Gulf states’ oil and financial surpluses would be a decisive factor in the event of any wider conflict between the US and China.
This matter of the Abraham Accords leads us to the million-dollar question: how in the world do we explain the United States’ seemingly unconditional backing of the Zionist regime in Israel, with both parties turning a blind eye to, or else openly denying, ethnic cleansing and genocide? I’ve noticed that you seem relatively hostile to the idea of the alliance being the consequence of some sort of nefarious lobby. So how might you explain what John F. Kennedy famously told Golda Meir was a “special relationship”?
The US relationship with Israel really took off after the 1967 war, when Israel proved its utility in breaking apart the Arab nationalist and radical movements of the time. From that moment onward, the US begun to supply Israel annually with billions of dollars’ worth of military hardware and financial support, which has continued through to today.
This is why Israel, despite being the world’s thirteenth wealthiest economy by GDP per capita—richer than the UK, Germany, or Japan—has received more cumulative US foreign aid than any other country. Indeed, in 2021, before the war on Gaza began, Israel received more US foreign military financing than the entire rest of the world combined.
Alongside this military and economic support, we need to also acknowledge the role of the US state in blocking any international sanction of Israel on the world stage. This US support to Israel is not tied to one particular president or party—it is bipartisan and permanent.
The reason for this unstinting US support is precisely connected to Israel’s role in upholding and defending American interests in this strategic region. This support cannot be separated from the role that oil plays in capitalism and the US relationship with the Gulf states.
US policymakers are very explicit about these connections. We can take, for instance, the remarks of Alexander Haig, US secretary of state under Ronald Reagan, who once stated, “Israel is the largest American aircraft carrier in the world that cannot be sunk, does not carry even one American soldier, and is located in a critical region for American national security.” Or as former US President Joe Biden put it in 1986: Israel “is the best $3-billion investment we make. Were there not an Israel, the United States of America would have to invent an Israel to protect her interests in the region.”
A critical reason for why Israel plays this particular role in American power is its settler-colonial character. Like all settler colonies, Israel is a highly militarized and violent society. A substantial proportion of Israeli society benefits from the ongoing dispossession of the Palestinian population and has come to see these privileges in racialized and messianic terms.
With this distinct social structure and dependent upon external support for its survival in a hostile region, Israel is a much more dependable ally of the United States than a normal “client” state (like Egypt or Jordan). In this manner, Israel’s place in the architecture of American power is akin to South Africa’s role in supporting Western imperialism across the African continent during the years of Apartheid.
This is why I think that arguments pointing to an “Israel lobby” as the explanation for US support of Israel are muddle-headed and wholly wrong. The lobby argument is essentially a liberal one, which looks to the actions of an “interest group” to understand how states decide policy rather than approaching state institutions through the class dynamics of capitalism.
I also think the lobby argument is politically dangerous. It implies that US capitalism could be a force for good if not for the malign influence of foreign actors. It diverts our attention away from the all-important questions of imperialism in the Middle East and the centrality of oil to contemporary capitalism.
Of course, this is not to say that there is no such thing as a pro-Israel lobby! But I think we need to understand the various organizations that make up this lobby as a disciplining tool, used to police and repress political movements (and speech) on Palestine. At the domestic level, they help articulate, legitimate, and sustain US foreign policy in the Middle East in the face of growing popular sympathy for the Palestinian struggle. These organizations also form a key route through which anti-Palestinian racism is promoted and normalized. But they are absolutely not the underlying reason for why the United States supports Israel.
How might the struggle for Palestinian liberation be linked to the fight against crude capitalism? A number of observers have described the Palestinian struggle as the lynchpin to liberation across the region. How would you characterize the centrality of this particular struggle? What is the relationship between Palestinian freedom and anticapitalist struggle today?
As I’ve emphasized, Palestine needs to be approached from a regional perspective. We can’t understand US support for Israel—and the near eighty-year dispossession of the Palestinian people from their homes and lands—without situating this in the wider Middle East and the enduring reality of an oil-centred global capitalism.
This is why Palestine—and the broader politics of the region—is fundamentally a climate issue: it’s not because of “ecocide” in Gaza or Israel’s exploitation of Mediterranean gas fields. These are obviously important factors to understand and explain as part of our political agitation, but they are not the key reasons for why climate activists should be in solidarity with the Palestinian struggle.
It is the Middle East’s centrality to the global oil economy—and thus the region’s importance to US imperialism—that explains why Israel can continue to act with impunity. The liberation of Palestine is a crucial part of breaking with fossil capitalism, because it would fundamentally challenge the imperial architecture that underpins and perpetuates this system at the global level.
But to ground Palestine in the region means more than just considering the realities of Western intervention. We need to take seriously the dynamics of capitalism in the Middle East itself—the specific class and state structures, how local ruling classes accumulate, cross-border flows of capital and labor, and so forth. These questions obviously intersect with imperialist interests and the bigger global picture, but they can’t be reduced to that.
An examination of capitalism at the regional scale reveals a staggering polarization of wealth and power, both within individual countries and across the region as a whole. This is not just because of war and conflict; it is the direct result of economic restructuring pushed heavily by international financial institutions over the last two decades and willingly implemented by autocratic states.
By some measures, the region is the most unequal in the world, marked by huge levels of mass displacement, poverty, and famine-like conditions—all existing alongside the extreme wealth of a tiny social layer. One recent study found that just thirty-one billionaires hold the same amount of wealth as the bottom half of the region’s entire adult population.6“Policy Brief: The Impact of Covid–19 on the Arab Region: An Opportunity to Build Back Better,” United Nations Sustainable Development Group(July 2020), 3, tinyurl.com/ymsst8jx. These outcomes of capitalist development are part and parcel of how imperialism operates, reinforcing an order that has been immensely profitable for local ruling classes—particularly those in the Gulf, which remains the core zone of capital accumulation in the region.
Taking this regional perspective also makes clear that struggles for social and political transformation in the Middle East cannot be understood in isolation; they are deeply intertwined across the region. The commonality of social conditions across the region was powerfully illustrated in 2011, when political mobilizations and demands spread rapidly from one country to another, reflecting a shared experience of marginalization and political repression.
We can’t be consistently anti-imperialist without also being anticapitalist—we need to take the regional power structures seriously.
For these reasons, we can’t be consistently anti-imperialist without also being anticapitalist—we need to take the regional power structures seriously. I think such an approach points to how the struggle in Palestine is mutually connected to other social and political struggles in the region (for example, in Sudan). This is true not simply in a moral sense but in a real and substantive manner.
It’s not a matter of prioritizing one struggle over another—a progressive political victory in one part of the region would have enormous implications in another. Again, that was the real potential of the 2011 uprisings, and this is why Western states and local regional powers invested such energy in beating back those revolts.
Fighting climate change often feels futile, with big oil reaping record profits during the hottest year on record. Do you see any strategic chokepoints when it comes to organizing against crude capital?
I’m skeptical of the idea of “strategic chokepoints” because I think it can reduce left strategy to the search for a magic bullet, rather than the longer-term building of political and organizational capacity. I don’t think there is any substitution for grassroots mobilization grounded in mass, class-based politics. Of course, there might be different tactics that go towards strengthening that kind of politics, but decisions around those tactical questions depend very much on location and circumstance.
In general, I think it’s essential for the Left to put the climate question at the center of our politics in this juncture. It is becoming increasingly obvious that we are living the climate collapse in real time—it’s not something that “might happen by 2100 if we don’t do x, y, or z,” which is how the mainstream climate debate typically frames the timeline of climate change.
The formal target of a 1.5-degree warming limit has almost certainly been exceeded and the likelihood of a whole range of “tipping points” emerging in the near future is very high. All of this will have catastrophic effects on ecological systems, food production, and human livelihoods.
Faced with this, we can’t treat ecological issues as simply another one of the many problems of capitalism that we campaign against. The ongoing climate collapse increasingly determines conditions of life and work on the planet, and it runs through everything else: war and militarism, the global distribution of wealth, mass displacement, racism, and the livability of urban spaces.
And as with all moments of crisis, it is the poorest and most marginalized that will bear the immediate brunt of this. Capitalism cannot solve this crisis but is instead wielding it as an opportunity: using it to push forward aggressive social transformation and to extend the power and wealth of capital.
So, we need to insist that the problems we face are systemic in nature, not the result of fossil fuel companies or bad climate policies. The strength of the oil industry and the headlong rush into ever-increasing fossil fuel production are manifestations of the problem, not its cause. In this context, I think a key agitational point must be to call out the widespread illusion that we are currently undergoing a global “green transition” away from fossil fuels towards renewables. This is a myth, and it was just as much a myth under Biden as it is under Trump (and it’s also a myth globally).
So-called energy transitions under capitalism have always been additive. For instance, the rise of oil in the middle of the twentieth century didn’t end the use of coal but was added on top of it. We’re producing and consuming more coal than ever before. The same is true with natural gas. Natural gas only really became an important energy source in the 1980s and 1990s. Now it is significant and substantial, particularly in electricity production. But it doesn’t mean that oil or coal have declined in terms of their absolute production and consumption.
What matters is the absolute production of fossil fuels, not their relative share.
The reason why energy transitions are additive is because of capitalism’s tendency to increase energy throughput, to draw in new forms of energy production and increase the total quantity of energy consumed and thus the quantities of commodities produced. Historically, the only times that fossil fuel consumption has temporarily fallen is when economic activity significantly contracts: the Covid–19 pandemic was one example, as was the 2008 global crash, and the 1980–82 recession. Otherwise, capitalist production tends to demand ever-increasing energy (and other resources). The staggering energy needs of AI and data centers is just the latest example.
The problem is that so much of the debate around energy under capitalism is framed in relative terms, not in absolute terms. Ideologically, what this does is give the illusion that we are moving forward rather than backwards. What matters is the absolute production of fossil fuels, not their relative share.
Similarly, the kinds of technologies now being promoted as part of this so-called green transition—notably electric vehicles, carbon capture and storage, hydrogen, and biofuels—are also false and taking us down completely the wrong path. They are leading to new forms of extractivism in the Global South and are being used by oil companies to cover the expansion of hydrocarbon production. That’s why the biggest oil companies in the world are enthusiastically promoting these fake solutions while simultaneously increasing investment in oil and gas.
But I don’t think this is a time for pessimism. The Palestinian poet Mahmoud Darwish once wrote of “cultivating hope” even in what appears to be the most difficult of circumstances. The realities of capitalism are today very stark and obvious, and I think this is becoming a moment of clarity about the utter irrationality of this social system.
It is not difficult to make the argument that we need to break with capitalism, the challenge is convincing people that this is possible and finding a way forward. We can be hopeful about the possibilities of change, and what we do today matters for the future. ×
Adam Hanieh is professor of political economy and global development at the Institute of Arab and Islamic Studies, University of Exeter (UK). He is also a research fellow at the Transnational Institute.
Notes & References
- For one version of this account, see chapter 4 in Matt Huber, Lifeblood: Oil, Freedom, and the Forces of Capital (Oxford: Oxford University Press, 2013).
- Adam Hanieh, Crude Capitalism: Oil, Corporate Power, and the Making of the World Market (New York: Verso, 2024), 174.
- David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2006), 27.
- Hanieh, Crude Capitalism, 181.
- Peter Gowan, The Global Gamble: Washington’s Faustian Bid for World Dominance (New York: Verso, 1999).
- “Policy Brief: The Impact of Covid–19 on the Arab Region: An Opportunity to Build Back Better,” United Nations Sustainable Development Group(July 2020), 3, tinyurl.com/ymsst8jx.