Crude Alliances: The West’s Oil-Stained Morality
As Washington lashes out at India over Russian oil, it might first consider the skeletons in its own strategic petroleum closet.
If oil is said to be the lifeblood of geopolitics, then duplicity surely constitutes its circulatory system. With characteristic bombast, Donald Trump’s Washington has turned on India, accusing it of bankrolling Russia’s war in Ukraine by continuing to import discounted crude from Moscow. The White House has responded by slapping tariffs on Indian goods and threatening harsher penalties unless New Delhi halts its purchases.
Beneath this unseemly sound and fury lies monumental hypocrisy. From Tehran to Texas, Riyadh to the Ruhr, no country has weaponized oil more often or more cynically than the United States. India’s critics in Washington ought to revisit their own history before invoking the language of morality in global energy markets.
In the 1930s, as Hitler was goose-stepping through Europe and Japan was laying siege to China, American oil giants were doing brisk business with the fascist aggressors of the times.
Standard Oil of New Jersey (the precursor to ExxonMobil) sold ethyl lead, an essential aviation fuel additive, to Nazi Germany. As historian and investigative journalist Edwin Black documents in ‘Internal Combustion’ (2006) and Charles Higham exposes in ‘Trading with the Enemy’ (1983), the aviation fuel additive was critical to powering German bombers over Poland, France and beyond.
Far from rogue profiteering, this was the norm. Despite President Franklin D. Roosevelt’s public neutrality, American firms continued lucrative trade with fascist regimes. Japan, in particular, received over 80 percent of its oil imports from the U.S. until mid-1941.
It was only after Tokyo’s occupation of French Indochina that the Roosevelt administration froze Japanese assets and halted oil exports - an action that, many argue, hastened the attack on Pearl Harbor. The Second World War merely sharpened the realisation that oil was power. After the war, that power was institutionalised.
In the 1970s, following the Arab oil embargo, America recalibrated its strategy. While preaching energy independence and decrying OPEC’s price manipulation, Washington quietly deepened its embrace of authoritarian petro-states, chiefly Saudi Arabia. America’s Faustian bargain with Saudi Arabia dated back to 1945, when FDR had struck a historic deal with Ibn Saud aboard the USS Quincy: oil for security and no questions asked.
The deal was military protection in exchange for stable oil flows and pricing in U.S. dollars, cementing the ‘petrodollar’ system which allowed the U.S. to maintain global financial primacy and run deficits without consequence. The arrangement also gave Saudi Arabia carte blanche to fund Wahhabi ideology across the Muslim world, confident that its Western patrons would not interfere. This alliance, sealed under Republican and Democratic presidents alike, became the core of America’s global energy order.
The 1980 Carter Doctrine, which declared the Persian Gulf a vital American interest, made clear that oil security would henceforth be enforced at gunpoint if necessary.
Even when Washington declared oil-exporting regimes as pariahs, the back channels rarely closed. Iran under the Shah was a critical U.S. partner. After the 1979 revolution, when the regime turned violently anti-American, sanctions followed. Yet companies like Halliburton and Conoco were later found to be operating via subsidiaries in Dubai and Europe.
This double-dealing reached its zenith in the Iran-Contra affair. Although the scandal is often remembered for illegal arms sales and Latin American insurgents, oil money was the unspoken lubricant of the entire enterprise. Funds from secret Iranian transactions were diverted to Nicaraguan rebels, bypassing Congressional oversight.
In Latin America, duplicity took on a different hue. Venezuela, once feted by U.S. officials as a model oil democracy, was abruptly sanctioned under Hugo Chávez, whose nationalisation of foreign oil assets triggered American ire. The sanctions accelerated under Nicolás Maduro, with disastrous humanitarian consequences but little geopolitical payoff. Meanwhile, U.S. refiners quietly lobbied for exemptions to continue buying Venezuelan crude, citing domestic fuel shortages.
As Timothy Mitchell argues in ‘Carbon Democracy’ (2011), oil has always shaped not only how governments exercise power, but how they present that power to their citizens. The U.S. narrative of spreading freedom through fossil fuels rarely matches the reality on the ground.
No case better illustrates oil’s corrosive pull than the 2003 invasion of Iraq. Publicly justified by spurious claims of weapons of mass destruction, the war masked a deep strategic calculus to control over the world’s second-largest oil reserves. The war fractured the Iraqi state, fuelled sectarian conflict and created power vacuums later filled by ISIS. While Iraqi civilians suffered, American oil majors like Chevron and ExxonMobil were handed lucrative contracts. The result was not oil-fuelled nation-building but petrodollar plunder cloaked in the language of liberation.
Today, the U.S. has turned its sights on India, accusing it of funding Russia’s Ukraine war by buying Russian oil. But Indian refiners have always operated within the rules. Purchases are below the G7’s $60-a-barrel price cap, routed through international traders, insured and transported lawfully.
Meanwhile, Europe’s virtue is elastic as countries like Hungary, Slovakia and the Czech Republic continue importing Russian pipeline oil with Brussels’ blessings. Japan secured exemptions through 2026. Turkey, a NATO member, ramped up imports of Russian petroleum products. Even the UAE, a key U.S. partner, serves as a laundering hub for sanctioned Russian diesel.
It seems that Washington’s allies are permitted their loopholes so long as the geopolitical choreography suits American interests. Because in the grand American playbook, the one thing that flows more freely than crude is duplicity.
Comments