Middle East: oil and political order

This paper traces the interaction of MENA oil and the globalization of financial capital via a neo-Granscian lens. It exposes how oil is a main source of global power and traces its linkage to global finance capital and to global military intervention. The paper first examines the struggle over oil rents in the 1970s between OPEC and the West and the paradox that the enrichment of MENA states was accompanied by Middle East oil’s pivotal contribution to the globalization of US financial capital and US hegemony. It also looks at how the latter, in turn, reincorporated MENA as a periphery of the world capitalist system albeit with the oil monarchies privileged clients of the core. A bid to make oil the basis of regional economic integration failed and instead oil rents were recycled to the West in return for security, with Saudi Arabia became the “swing producer” on behalf of its US ally. Oil rents shaped MENA state formation, leading to the paradox of resilient authoritarian regimes (while deterring democratization) in weak states; where states failed, the struggle to control hydrocarbons drove conflict. Economically, the outcome was the “development of underdevelopment” amidst massive regional inequality; but states’ developmental paths still varied widely between globalized city-states and war states, a function of territorial size and state formation experiences. And oil helped make MENA a conflict prone region: it helped militarize the region and made it a site of war between aspirant regional oil hegemons (Iraq) and the US world hegemon.