US post-war reconstruction plans drove Europe’s oil transition. The success of this project, however, depended fundamentally on a simultaneous realignment in the geography of global oil production. Due to tight supply at the time, increased American oil exports to Europe would have impacted US domestic prices, and for this reason, the Marshall Plan explicitly stipulated that Europe’s oil should come from outside the US. In this context, the Middle East was to emerge over the next decade as the principal source of crude oil supplies to Europe (and later, the rest of the world). The region had plentiful supplies, which, by the mid-1950s, would amount to nearly 40 per cent of the world’s proven reserves. Middle East oil also sat in closer proximity to many European countries, and its costs of production were much less than anywhere else in the world. Seemingly unlimited quantities of low-cost Middle East oil could thus be supplied to Europe at prices lower than coal, while ensuring that domestic US oil markets remained insulated from the effects of increased European demand. The recentring of Europe’s oil consumption around the Middle East was a remarkably rapid process: between 1947 and 1960, the share of Europe’s oil originating from the region essentially doubled, rising from 43 per cent to 85 per cent.
Adam Hanieh, Crude Capitalism: Oil, Corporate Power, and the Making of the World Market