The imperialist states have suddenly realized that in the next decade the survival of their economies will depend on importing oil from the Middle East. A wave of panic, expressed in speeches and articles on the ‘energy crisis’, has gripped the bourgeoisies of Western Europe, the United States and Japan. The predominant ideological form in which this problem is being presented is in terms of a conflict between the vulnerable ‘consuming’ nations; and the everricher ‘Arabs’ on whose goodwill the future of the industrialized capitalist nations depends. This presentation has led to discussions of how to lessen this tie and how to avoid a dependence which the capitalist states fear. Sections of the working-class movement, members of the British coal miners union, and parts of the liberal intelligentsia, confused about ecology, have also participated with suggestions of how to lessen the grip which ‘Arabs’ are acquiring on the economies of the world. This approach to the problem is profoundly misleading. Complaints about how rich the ‘Arabs’ are getting ignore the fact that the oil revenues are being paid to the Arab ruling classes. The capitalist development of the oil industry has undoubtedly altered the economic conditions of the Arab workers and peasants and the following decades should see a continued if uneven rise in their income and living standards. But the political consequence of the need for oil is that the workers of these countries remain victims of a vicious repression which is being intensified in order to guarantee continued supplies of petroleum. Moreover, the conventional view of the ‘energy crisis’ ignores the new relationship which is being forged between the Arab ruling classes and imperialist capital. In this relationship imperialism is being guaranteed continued access to Middle East oil while local ruling classes are to receive greater autonomy and military and political support. The main victims of the ‘energy crisis’ are not western consumers but the masses of the Middle East whose local oppressors and their foreign patrons are more determined than ever to maintain their position. The latter are converting the oil-producing states into plundered adjuncts of the advanced capitalist countries.

As a result of the rising importance of Middle Eastern oil, the regimes in the producing states have been able to transform their economies and to open a new relationship with imperialism. This serves the interests both of capitalism and of these ruling classes. While this process is in some respects similar to the dependent development taking place in other post-colonial states, such as Brazil, it also has certain differences. First, oil production is an activity that can operate in considerable isolation from the economy of the country in which it occurs. Secondly, unlike other exported minerals the demand for it and the unit price are guaranteed to rise over the next decade. Thirdly, the revenues from this export are paid directly to governments. This means that irrespective of pre-existing productive forces in these countries their governments are guaranteed immense financial power, and are in turn assured of a special support by the imperialist countries. In one respect the development of these countries is less significant since it bears no relation to the prior economic structure of the country as a whole, and does not result from the development of an indigenous bourgeoisie, participating actively with imperialism in capitalist production. On the other hand, this almost total separation of government revenue from socio-economic prerequisities makes the development all the more extraordinary. In addition, the volume and almost definite continuation of the government’s enrichment makes these ruling classes more formidable junior allies than those of other countries where capitalist development depends on more orthodox and less certain productive expansion.

The concept of the ‘energy crisis’ contains several distinct phenomena which, taken together, represent a major change in inter-imperialist relations and between the imperialist states as a whole and the Middle East countries which contain over 60 per cent of known reserves. The most fundamental point of all is that in the next decade world demand for oil will double, from around 40 million barrels a day in 1973 to between 80 and 100 million barrels in 1980. While the rise in demand within each different imperialist economy will be of roughly the same order, the changes in supply will be asymmetrical. The us will double its demand—from 15 to 25 million barrels—while its domestic supply will falter or even fall from round the 12 million mark.

Alaskan production, if and when it can be started, will provide around 2 million barrels a day—i.e. only 20 per cent of the increase in demand. This means that us import needs will rise, from under 15 per cent in the early 1970s, to up to 50 per cent by 1980. Europe will continue to import most of its oil, since the North Sea will produce only 2–3 million barrels a day, and Japan too will continue its dependence on imports. The ‘energy crisis’ is therefore both a general ‘crisis’ of rising demand, but it is distorted by the disproportionate increase in us import needs. The result of the general rise in demand is that the producer states can raise their revenues, and by massive increases in income can play a growing role in investment within the advanced capitalist countries. The result of the us specific rise in demand is that capitalist countries will be competing for the supply, thereby exacerbating their own inter-imperialist contradictions and further strengthening the hands of the producer governments.

Among the oil-producing states of the Middle East, Saudi Arabia falls into a special category. First, its oil reserves are by far the largest: in 1971 it had 23 per cent of all known reserves in the world, compared to 10·5 per cent in Kuwait, 9·0 per cent in Iran, 5·5 per cent in Iraq and 4·0 per cent in Libya. While in 1971 it produced less than 10 per cent of total world production, by 1980 it is expected to produce over 20 per cent. As the demands of the American market multiply, the country ready to satisfy these needs is Saudi Arabia, where production is expected to rise from 7·3 million barrels a day in 1973 to 20 million in 1980. The net result of this—a rise is us demand and Saudi production by 12 million barrels—is that by 1980 the world’s most developed capitalist country could depend for survival on supplies of Saudi oil, although the us will try to avoid this by developing other supplies. The second crucial aspect of Saudi Arabia is that it is protecting imperialist interests in the Arabian peninsula as a whole: while Iran, with a larger population and a far more powerful army, is guarding the waters of the Gulf and the Indian Ocean, Saudi Arabia has positioned itself to crush anti-imperialist threats in the Arabian peninsula itself. On top of these two distinguishing factors comes a third: Saudi Arabia is a country more isolated from the outside world, more plunged in religious mystification, and more socially backward than any other major oil-producing state. It is a wholly artificial entity, created by inter-tribal war in the mid-1920s, which has suddenly acquired immense wealth and an international role for reasons totally external to its pre-existing socio-economic character. Given its importance to world imperialism, it is essential to analyse this highly anomalous fabrication.