Chapter 43 America's Postwar Oil Hegemony

Little attention has been paid to the central role of oil in the post-war European recovery known as the Marshall Plan, named after its architect, US Secretary of State George Marshall.Beginning in 1947, the largest single expenditure of the ERP recipient countries in Western Europe was the use of aid dollars to purchase oil, which was mainly supplied by American companies.According to official State Department records, about 10 percent of the dollars the U.S. spent on Marshall aid returned to Americans for oil purchases. By the end of the war, the U.S. oil industry had become as much an international corporation as BP.Their main oil resources are located in distant regions such as Venezuela and the Middle East.After the war, people referred to Standard Oil Company (Exxon), Socony-Wycombe Oil Company (Mobil), Standard Oil Company of California, Texaco and Gulf Oil in New Jersey as the "big oil companies". They decided to act to gain absolute control of Europe's post-war oil markets.

The war severely damaged Europe's coal-based energy situation.Germany lost its reserves of coal fields in the east, and coal production in the west was only 40% of pre-war levels.Coal production in the UK fell by 20% compared to 1938 levels.Under the Iron Curtain defined by Churchill, oil production in Eastern Europe also declined due to the lack of access to Western European markets. In 1947, half of Western Europe's oil was supplied by five American oil companies. The oil giants in the United States did not hesitate to seize this rare opportunity.Despite the occasional congressional inquiries and the protests of some middle-level officials, Marshall Plan funds were clearly being misused, and Big Oil was forcing Europe to pay a high price, a very high price.This price was twice as high as the European oil price from 1945 to 1948, rising from US$1.05/barrel to US$2.22/barrel.Although the oil comes from inexpensive oil fields in the Middle East, the freight is calculated through a well-designed complex formula, which is linked to the freight from the Caribbean to Europe, which is much higher than the cost.

Even within the European market, the cost of oil varies enormously.Greece was forced to pay US$83 per ton of fuel oil, while the UK only paid US$395 per ton for the same fuel oil.In addition, US companies, backed by the Washington government, refused to use Marshall Plan dollars to build domestic refining capacity in Europe, further intensifying the control of US "big oil" over post-war Europe. When the two major British oil companies, Anglo-Persian Oil Company and Shell Oil Company, resumed their production capacity, the five companies in the United States had to expand into seven companies to share the oil of post-war Europe and the rest of the world market.By the 1950s, Anglo American's position was unrivaled.They control the unbelievably cheap supplies of Middle Eastern oil and the markets in Europe, Asia, Latin America, and North America.

In the 1950s, petroleum seemed to be a staple in people's daily lives.Oil companies made billions of dollars selling oil to new markets around the world.At that time, automobiles and related industries were the largest industrial sectors in the American economy.Under the guidance of Eisenhower's "National Defense Highway Act", the United States invested hundreds of millions of dollars in taxes on the construction of modern highway infrastructure across the country, on the grounds that once the Soviet Union launched a nuclear war, the highway system could be used to evacuate cities.Despite the railroad's advantages over the less fuel-efficient automobile, railroad infrastructure was neglected and left to decay.This period coincided with the time when Wilson, the former chairman of a major Detroit automobile company, was Secretary of Defense. He even boasted that "whatever is good for General Motors is good for America." He should have added: Good for Exxon, Texaco and the oil bosses, too.Oil became the most important commodity driving the economy.