Oil Industrialization in the Middle East

Abstract

The building of the global oil industry in the Middle East served as the occasion for one of the largest political projects of technical and economic development in the modern world. Scholarship has long associated an abundance of natural resources such as oil with autocracy in the Middle East while overlooking the sociotechnical ways in which oil operations were built with political consequences for the shape of the state and the international oil corporations. The early period of oil development was marked by oil abundance up to World War I, when demand for oil started to increase rapidly with the invention of the internal combustion engine. The cheapest source of production was in the Middle East. From the perspective of the largest transnational oil corporations to emerge in this period, the energy system needed to be built in a way that demand and overabundance were managed. Oil industrialization enabled the production and large-scale consumption of this new and abundant source of energy but was also connected with striking oil workers and controlling or blocking processes of industrialization in rival sectors such as the coal and the chemicals industries. In the first three decades of the 20th century, the process was made possible through the building of an international oil economy that took the form of production quotas and consortium agreements to restrict new oil discoveries in the Middle East. Oil industrialization projects intensified after World War II due to a flood of petrodollars into OPEC countries such as Iran and Saudi Arabia. Rising oil revenues and sovereign control achieved through oil nationalization triggered the execution of five-year development plans of industrial and infrastructural expansion. The birth of environmental activism in the 1960s–1970s coincided with the end of oil abundance and the fear of the planet’s destruction, spurring the passage of legislation to place limits on the hydrocarbon economy in which the machinery of oil industrialization had thrived.