Climate activists are liable to focus narrowly on the oil industry or “fossil capital,” an emphasis that can obscure the extent to which oil (and thus carbon emissions) are integrated into global capitalism—from consumption and lifestyle, to industrial production, to food and agriculture, to transportation and logistics. Yet this realization can also lead certain versions of the left to presume oil’s overwhelming power as a mythic quality of the commodity itself: as the impetus of war, at the heart of an “extractivist mindset” behind all manner of imperialist political movements, or a driver of disinformation campaigns that ultimately lead to an inability to address global warming. The last thirty years of Marxist and critical scholarship on oil has sought to dethrone oil from this purportedly central or special role in causing climate change and in shaping the global economy—it is, after all, capitalism and its accumulation imperatives that are behind these disasters. But what if this critique of “oil fetishism” led us to underestimate —or at least, mislocate—the breadth, depth, and extent of the oil industry’s power?1Here, I am thinking particularly of the centrality of arguments made by Timothy Mitchell in Carbon Democracy to certain leftish understandings of oil. Timothy Mitchell, Carbon Democracy: Political Power in the Age of Oil (London and New York: Verso, 2011).
Viewing the twentieth and early twenty-first centuries through the prism of the oil industry’s corporate structures, crises, technological developments, and geopolitical machinations, Adam Hanieh’s Crude Capitalism: Oil, Corporate Power and the Making of the World Market leaves readers with a new appreciation for the scale and depth of the problem confronting the ecosocialist left and oil opposition movements more generally. The book traces the dynamic international corporate structure that the oil industry has taken over the twentieth century, from Standard Oil to the first version of the Seven Sisters (that is, “Big Oil”) to OPEC and the rise of National Oil Companies (NOCs). Scratching beneath the surface of the familiar oil firms, one finds oil majors and small independents, cutthroat competition alongside collusion and coordination, resource nationalism and revolutionary socialism abutting monarchal reaction. By delving into these details, Crude Capitalism provides an indispensable context for analyzing the world capitalist system and oil’s peculiar role in producing and maintaining its geopolitical structure—thus challenging many of the truisms and shorthand assumptions of the global left.
In examining the corporate history of the oil industry, Hanieh attends particularly to “what oil becomes once it is pulled out of the ground”: yes, energy, but also petrochemicals, plastics, fertilizers, and by way of “vertical integration,” a whole realm of wealth, credit, and debt that is at the heart of structural changes in the global economy since the 1970s in particular.2Adam Hanieh, Crude Capitalism: Oil, Corporate Power, and the Making of the World Market (London and New York: Verso, 2024), 6. Crude Capitalism asks us to examine the “upstream” sectors of oil “extraction” (the most popular site of left and environmentalist critique) only in the context of the quite diverse “downstream” of oil, which includes pipelines, refineries, petrochemical facilities, ports, and gas stations, as well as banks and financial derivatives—and today, even renewable energy and carbon capture and sequestration, bioenergy, and hydrogen. Oil’s material fungibility—mobile, energy dense, and chemically flexible—is a synecdoche for the broader fantasy that capitalist freedom might be unwedded from the material constraints of space and labor. Pace Thomas Pynchon’s version of IG Farben in Gravity’s Rainbow, this is an image of oil adhering to “Plasticity’s central canon: that chemists were no longer to be at the mercy of Nature.”3Thomas Pynchon, Gravity’s Rainbow (New York: Viking Press, 1973), 249.
In thirteen chapters, Crude Capitalism unfolds this internal structure of the oil industry’s rise and transformation in the last century. Key to understanding the argument is some basic industry terminology. The oil industry arose in the United States during the Gilded period of intense capital concentration, with Standard Oil as its expression as the first oil “major”. It was not Standard Oil’s control of oil fields that led it to such a size, but rather its strategy of vertical integration—that is, its strategy of owning multiple stages of the supply chain—as an attempt to manage competition and control (over)production. The latter is the crucial crisis tendency of the oil industry, for without coordination and collusion provided by a trust, competition among the multiplicity of upstream oil producers would encourage each to extract as much oil as possible, leading to falling prices and thus falling profitability.
Vertical integration offered a strategy of both control and flexibility, allowing the largest firms to integrate “downstream” infrastructures such as pipelines and refineries in order to edge out “upstream” competition among oil producers. For if an independent or small producer extracts an unrefined barrel of crude from the earth but cannot find a way to bring or refine that barrel to market, then they will be forced to lower their production quotas or sell at a lower price. Thus, even after Standard Oil was broken up into the firms that would become the familiar names of Exxon, Mobil, and Chevron, these large “integrated firms” concentrated on vertical integration while displacing the risks of (over)production onto smaller, “nonintegrated firms” or independents. “Standard’s corporate structure would set the template for the global oil industry through to the present day”, and so too does the integrated/nonintegrated division continue to shape, for instance, higher-risk oil plays such as US shale (that is, hydrofracking) markets.4Hanieh, Crude Capitalism, 36.