Oil, Imperialism, and Global Capitalist Crisis
A Review of Adam Hanieh’s Crude Capitalism
May 16, 2025
ADAM HANIEH’S IMPORTANT BOOK, Crude Capitalism, deserves to be widely read and its contribution to the understanding of the crisis-ridden times we are living in thoroughly debated. A great strength of the book lies in Hanieh’s insistence on taking seriously both the economic and political aspects of the oil industry’s development since the late nineteenth century.
The book is rich in detailed research into the intricacies of corporate and state policy decisions and offers a trove of empirical data, integrated into a bigger and deeply interconnected story of the dynamics of geopolitical competition between capitalist powers great and small. The structural relationship between oil and contemporary capitalism is illustrated by the rise of the petrochemical industry and the integration of petrochemical products into the fabric of everyday life during the oil-fueled “Great Acceleration” of capitalist expansion in the wake of the Second World War.1Adam Hanieh, Crude Capitalism (New York: Verso, 2024); Ian Angus, Facing the Anthropocene: Fossil Capitalism and the Crisis of the Earth System (New York: Monthly Review Press, 2016).
As Hanieh documents in detail, the “petrochemical revolution” was more than an opportunistic effort to transform waste from the expanding oil industry into a new raw material. It was driven by dynamics deep within the capitalism system, especially military competition. The outcomes of the two world wars played a critical role in this process, providing the legal instruments for the seizure of industrial knowhow from German chemical companies by the US government through the Trading with the Enemy Act (1917) and creating hothouse conditions for the incubation of the US petrochemical industry during the Second World War.2Hanieh, Crude Capitalism, 137, 142./mfn] The enforced autarchy of the war, which cut US manufacturers off from supplies of natural rubber, an essential raw material for the automotive industry and critical to the war effort, accelerated the development of synthetic rubber and its widespread adoption, along with other petrochemical products. Rapid economic growth across the globe in the post–Second World War period was structured around the expansion of oil production and distribution: a process that should be thought of as the addition of oil to coal, rather than a shift away from coal, Hanieh argues.2Hanieh, Crude Capitalism, 20.
This reflected the expanding demands for energy as capitalism expanded. Oil-fueled growth brought with it whole new industries related to petrochemical products. These sectors embodied extreme forms of capitalism’s inherent tendencies towards commodity overproduction and built-in obsolescence, and they baked assumptions of “disposability” into ever more sectors of manufacturing.3Hanieh, Crude Capitalism, 153.
The development of thermoplastics, which dramatically reduced the costs of producing millions of plastic components, played a foundational role in this process. In turn, it demanded the expansion of advertising and publicity industries geared towards selling the idea of a “consumer” lifestyle as a symbol of progress and modernity.
There are also other ways the petrochemical industry embodies intense forms of capitalism’s most destructive urges. Petrochemical plants, like the oil industry they sprang from, require enormous investments in equipment and machinery to sustain the automated flow of chemicals through their systems, and promise eye-watering levels of productivity for their owners, thanks to the extremely small cost of labor required to operate them compared to the expenses of production.4Hanieh, Crude Capitalism, 151.
Hanieh also notes that decoupling large swaths of commodity production from renewable resources has intensified ecological crisis on multiple levels. Decomposing plastics in the oceans, for example, are intensifying the effects of global heating by interfering with oceans’ role as carbon sinks.5Hanieh, Crude Capitalism, 301.
One of the strengths of Hanieh’s approach lies in presenting a history of oil’s role in capitalism that takes seriously the challenge of looking beyond the historic Western oil firms’ function as adjuncts of Western imperialism. The “Great Acceleration” in the post–Second World War period is thus a story not only of the Long Boom of Western capitalism but also of the expansion of Soviet state capitalism.6Chris Harman, Zombie Capitalism: Global Crisis and the Relevance of Marx (Chicago: Haymarket Books, 2010).
As Hanieh demonstrates, like its US-centered counterpart, Soviet state capitalism was also largely oil-fueled in the decades after 1945. Supplies from the giant West Siberian oil fields came onstream and helped to lubricate the USSR’s empire-building as it gradually incorporated many newly independent states of the “postcolonial” world into its economic, political, and military sphere of influence.7Hanieh, Crude Capitalism, 165. The expansion of Soviet oil supplies and the growth of the Soviet oil industry eroded the control of the Western oil majors (the famed “Seven Sisters” cartel that had emerged in the interwar period) over the global oil market. It gave the ruling classes of newly independent states access to technical knowledge that would prove essential to creating national oil production infrastructures outside the direct control of the Western powers.
Hanieh makes a persuasive case for seeing the rise of the national oil companies (NOCs) in the Global South as a key moment in the development of contemporary capitalism. The emergence of the Organization of the Petroleum Exporting Countries (OPEC) as an alternative to the Seven Sisters cartel played a key role in breaking the Western oil companies’ enforcement of artificially low prices for oil through the Achnacarry Agreement, a memorandum drawn up between representatives of major Western companies in a Scottish hotel during a grouse-shooting trip in 1928.
As Hanieh has outlined elsewhere, the takeover of oil production by the state in most of the Persian Gulf from the 1970s onwards laid the basis for the emergence of a new center of capital accumulation, through the development of a range of industrial and commercial sectors under the control of a rising regional capitalist class.8Adam Hanieh, Capitalism and Class in the Gulf States (Palgrave Macmillan, 2011); Adam Hanieh, Money, Markets, and Monarchies: The Gulf Cooperation Council and the Political Economy of the Contemporary Middle East (Cambridge: Cambridge University Press, 2018). This pattern was mirrored in other areas, as the emergence of NOCs in Brazil and China illustrates, and should not be seen as a mechanism specific to the distinctive conditions of the Gulf.
Despite the US corporate media’s presentation of the “oil shock” as a moment when Arab oil producers “held the West to ransom,” Hanieh explains how the US capitalist class and its allies were able to turn the wild gyrations of oil prices to their advantage and prolong their dominance of the global system. This was achieved primarily through the continued use of the US dollar as the reference point of the global oil markets, in combination with the development of debt bondage as a mechanism to discipline weaker states.
The recycling of petrodollars was an important milestone in the reconfiguration of the global financial order in the wake of the first oil shock in 1973–74. It also laid the basis for long-term processes of financialization over subsequent decades, as vast sums of money flowed into the coffers of the oil producers. The story of how the spending sprees of ruling classes in the “postcolonial” world generally failed to lay the foundations for industrial takeoff but rather trapped these states into debt bondage to Western banks and the international financial institutions of Washington’s global order, is well known.
Hanieh is right to insist, however, that the world created by this process, while remaining fundamentally hierarchical, cannot be mechanically equated with the world of the colonial era. The NOCs located in the Global South must not be allowed to appropriate “anticolonial” rhetoric to cover up their crimes against humanity. Saudi Aramco is one obvious villain of this piece, though Egypt dictator Abdel Fattah el-Sisi’s role in accelerating the decline of the United Nations Conference of the Parties climate negotiations, in order to grease the wheels of oil and gas deals, probably deserves a mention.
This is not to deny that US domination of the global financial system during the neo- liberal period has played a fundamental role in ensuring the continuation of the United States at the center of the Western capitalist bloc, beyond the crisis at the end of the long postwar boom and into a short period of unipolar ascendancy following the collapse of the Soviet Union in 1991. Hanieh explores the interaction between the financial crisis, oil production, and the problems of bureaucratic planning in the crisis that engulfed the Soviet Union towards the end of the 1980s.
The “structural dependence of the Soviet bureaucracy on the income from oil exports” was, he argues, a key proximate factor in the inability of the USSR to survive the sharp collapse of oil prices in 1986.9Hanieh, Crude Capitalism, 203. The fall in the global price of oil slashed hard currency revenues, leading to ballooning foreign debt and undermining the ability to import grain, meat, technology, and consumer goods required to mask growing social inequality. Yet this begs the question as to why the Soviet Union’s ruling class was so dependent on imports from the world market in the first place.
Dead organic matter in the form of plastics chokes the biosphere, and zombie capital accumulates across the financial system.
Hanieh acknowledges that rising production costs in the West Siberian oil fields played an important role in creating conditions for the USSR’s final crisis in the late 1980s, pointing to the rising level of investment demanded by the high depletion rates of the wells drilled in the 1960s and inefficiencies in the bureaucratic planning process compounded by the use of substandard technology and tools. “This had pernicious and self-reinforcing effects. Industries producing civilian machinery and tools, for example, suffered from a severe lack of investment as money went into oil exploration and drilling, but this meant that much oilfield machinery and equipment was sub-standard and obsolete, further increasing the costs of oil exploration and production.”10Hanieh, Crude Capitalism, 203.
However, the death spiral of Soviet manufacturing in the 1980s was a long time in the making and was symptomatic of deeper problems with declining output/capital ratios over the previous decades, as noted by Chris Harman in 1970.11Chris Harman, “The Stalinist States,” International Socialism Journal 1, no. 42 (February 1970). As Harman later explained in Zombie Capitalism,“What produced crisis and waste inside Western enterprises and Soviet-style economies alike was the drive to accumulate at all costs…[It meant] investment expanding repeatedly at the expense of consumption, increased imbalances in the economy, a continual cyclical pattern to growth and increased alienation of the workforce.”12Harman, “Zombie Capitalism,” 204.
The long-term drivers behind capitalism’s system-wide tendency for the rate of profit to fall operated within the state capitalist economies of the Soviet bloc, just as they did in the West. The lessons of the failure of the Soviet Union’s Stalinist ruling class to close the competitive gap with its Western competitors, and the role of oil within that decades-long process, are vital to understanding relations between China and the US in a period of relative US decline.
Hanieh devotes a section of Crude Capitalism to outlining the emergence of a new East–East axis of oil and petro-chemical production in recent decades. He rightly emphasizes qualitative shifts in how the oil industry has operated at a global level since the 1970s that mean that despite the rebirth of a new sorority of Western “supermajor” oil companies, the “primary determinants” of the sector are now non-Western firms.13Hanieh, Crude Capitalism, 252.
A key factor powering the literal reorientation of a major segment of the global industry has been the rise of Chinese manufacturing as the new “workshop of the world.” Chinese demand for oil rose by 30 percent between 2000 and 2019, or the equivalent of a second US entering the world market.14Hanieh, Crude Capitalism, 261. It is not only oil supplies that have shifted destination, particularly from Middle Eastern producers, but also petrochemical products and investment in refining capacity, which have likewise gravitated eastwards towards China.
However, as Hanieh also documents, it would be a mistake to assume that the picture is one of a rising “Eastern” powerhouse and stagnation or decline in US oil production. On the contrary, recent developments point towards the potential bifurcation of the global oil industry into Eastern and Western hemispheres. Highly regionalized production is now taking place across the Americas, boosted by the success of US and Canadian companies in extracting oil from shale and tar sands, with disastrous implications for global heating and climate breakdown.
The role played by oil and petrochemicals in China’s rise as the center of East Asian capital accumulation perhaps needs more thorough attention than Hanieh has been able to give it in this book. There are several potential lines of argument in this area that build on his analysis of the outcomes of contests between the US and Germany for dominance of the chemical industry in the first half of the twentieth century.
One of these is the important role played by synthetic fibers in the post–Second World War restructuring of the global textile industry. In a similar fashion to the hothousing of synthetic rubber, synthetic replacements for Japanese natural silk were also incubated in the US during the war. The manufacturing processes were then exported back to Japan and elsewhere in East Asia in the 1950s as part of US efforts to stimulate industrial development in the region and build partnerships with local ruling classes through investment and technology transfer.
A factor at play was the desire of the US to undermine the appeal of Communist movements, especially following the Chinese Revolution of 1949, through nurturing capitalist development on a Western model. This included eventually outsourcing aspects of manufacturing supply chains to the East Asian region, in textiles and later in the consumer electronics and semiconductor chip industries, which succeeded textiles as major frontiers for manufacturing investment and value creation from the 1960s onwards.
Both these sectors are extremely dependent on oil, as feedstock for plastic components and the polymers used in semiconductor manufacturing, and helped create new demand for energy to power the networked devices and data centers that today underpin large segments of the global economy. Like petrochemical products, semiconductor chips are fabricated through enormously costly, energy- hungry processes, which utilize vast amounts of the “dead labor” embedded in specialized machinery, equipment, and technical knowhow, but employ comparatively few workers directly.
Although semiconductor chips are not yet woven quite as deeply as other petrochemical products into the fabric of everyday life, they are increasingly critical to how society functions. Lower-specification semiconductors such as RFID chips are essential to logistics and have been one of the enablers of the globalization of supply chains by facilitating easier tracking of goods across long distances. Specialized semiconductors are critical to artificial intelligence products and services, including large language models and other forms of so-called generative AI that are now themselves sites of intense geopolitical and industrial competition, with rivalry between China and US over chip manufacture taking center stage.
This brings us back to the nature of oil as capitalism’s primary fossil fuel. Fossil fuels allow energy conversion at a much faster rate than other sources of energy, and it is oil’s portability and greater energy density compared to coal that helps explain the shift in fossil fuel consumption patterns. But as Hanieh argues, it is capitalism’s drive to accumulate at all costs that animates the dead matter of coal or oil, endowing it with apparent magical properties—as a means to “annihilate space with time,” as Marx pointed out.15Hanieh, Crude Capitalism, 8.
This raises a set of questions Crude Capitalism does not really attempt to answer but which are going to shape struggles for a livable future for decades to come. Can the exploited workers whose living labor power is the real source of capitalism’s dynamism recover their agency as the heart of a revolutionary movement against capital’s political and social power?
The historical lessons of how workers’ resistance has shaped the production and circulation of oil are surprisingly absent from the book, except for a few brief mentions. Integrating a meaningful discussion of the potential for resistance through disruption of the machinery of exploitation and resource extraction is always difficult, but it has to be done. Anything produced using fossil fuels exists in a moment of “borrowed time,” as it draws on resources that cannot be renewed except on vast geological timescales.
One way of conceptualizing the current epoch of multifaceted crisis is as a series of increasingly urgent demands for repayment of these debts, as dead labor piles up in the productive sphere, dead organic matter in the form of plastics chokes the biosphere, and zombie capital accumulates across the financial system. As Hanieh makes abundantly clear, all of these are bound up with how capitalism works, not the results of choices about which type of energy source to use. ×
Notes & References
- Adam Hanieh, Crude Capitalism (New York: Verso, 2024); Ian Angus, Facing the Anthropocene: Fossil Capitalism and the Crisis of the Earth System (New York: Monthly Review Press, 2016).
- Hanieh, Crude Capitalism, 137, 142.
- Hanieh, Crude Capitalism, 20.
- Hanieh, Crude Capitalism, 153.
- Hanieh, Crude Capitalism, 151.
- Hanieh, Crude Capitalism, 301.
- Chris Harman, Zombie Capitalism: Global Crisis and the Relevance of Marx (Chicago: Haymarket Books, 2010).
- Hanieh, Crude Capitalism, 165.
- Adam Hanieh, Capitalism and Class in the Gulf States (Palgrave Macmillan, 2011); Adam Hanieh, Money, Markets, and Monarchies: The Gulf Cooperation Council and the Political Economy of the Contemporary Middle East (Cambridge: Cambridge University Press, 2018).
- Hanieh, Crude Capitalism, 203.
- Hanieh, Crude Capitalism, 203.
- Chris Harman, “The Stalinist States,” International Socialism Journal 1, no. 42 (February 1970).
- Harman, “Zombie Capitalism,” 204.
- Hanieh, Crude Capitalism, 252.
- Hanieh, Crude Capitalism, 261.
- Hanieh, Crude Capitalism, 8.