There is no meaningful green transition because energy policy is controlled by state-owned oil companies that play an increasingly central role in the post-Empire world, a political economist has claimed.

Adam Hanieh argues that oil is inherently bound up with global finance, as well as anti-colonial movements that came to prominence in the 20th century. 

Speaking at an Independent Social Research Foundation lecture series on decolonisation, Hanieh explored the historical rise of petrostates in the Middle East. The ISRF Fellow argues that state-owned firms should not lead the shift towards a low-carbon, sustainable economy.

Hanieh argues that the vast power of state-owned oil companies stems from oil’s presence in nearly every aspect of life, from clothes and plastics to food production and global finance. Recognising this, he suggests, is essential to addressing the climate crisis.

He said: "These big national oil companies that really set the tone for the climate debate and the questions around things like plastics. They see very clearly that the future of oil depends upon these kinds of synthetic prochemical products continuing to grow.

“They understand that there is going to be a relative drop in the share of a barrel of oil that goes to petrol for the car, and a greater proportion of that oil is going to go into production of petrochemicals and plastics and other things.

“The problem with this is that the production of petrochemicals still involves a lot of emissions. Just because the oil isn't burnt as a fuel doesn't mean it's not producing emissions.”

Hanieh described what he called an "unassailable link” between oil and colonial domination after the First World War, noting that the Allies were said to have “floated to victory on a wave of oil”.

With its imperial military strength reliant on US oil production, Britain sought control of energy supplies in the Middle East to maintain global power.

Following the Second World War, global energy consumption surged in what Hanieh described as a "great acceleration”, with oil becoming the dominant fossil fuel due in part to its use by militaries.

He linked this to the current ecological crisis, as the burning of oil continues to release carbon dioxide that drives climate change.

In the second half of the 20th century, anti-colonial movements sought to break from imperial domination and assert control over natural resources.

Hanieh argued that "national liberation is inseparable from the question of oil,” because many independence movements aimed to use energy supplies for development following years of colonial deprivation.

This led to the establishment of the Organisation of the Petroleum Exporting Countries (OPEC) in 1960, with member states Saudi Arabia, Iran and Venezuela gaining greater control over oil production.

But the Western oil industry retained dominance, in part due to its previously established control over downstream sectors of refining, shipping and pricing.

At the same time, the US maintained financial supremacy through investment and lending, as well as the use of dollars as the dominant currency in oil trading, particularly by Saudi Arabia. 

The closing decades of the 20th century saw China emerge as a major global manufacturing centre, importing oil from the Middle East to meet rising energy demands and reshaping the global fossil fuel trade. 

This shift enabled the rise of large national oil companies, such as Saudi Aramco, now the world’s largest oil company.

According to Hanieh, fossil fuel use continues to rise despite widespread adoption of renewable energy technologies, including by Middle Eastern countries. 

During his lecture, on May 15, Hanieh argued that the Gulf states play an outsized role in climate policymaking — including hosting the United Nations Climate Change Conference (COP) and blocking last year’s global plastics treaty.

Hanieh, author of the book Crude Capitalism, added: "These countries are extremely high consumers of electricity, and most of their electricity is powered by fossil fuels, by oil and gas.

“What they want to do, and they are very explicit about this, is to lessen the amount of oil and gas they burn at home so that they can sell more abroad. 

"So there is no contradiction here between the ongoing fossil economy and what is being labelled as this green transition."

Hanieh explains that while energy transitions are commonly discussed, in real terms one fuel source does not replace another but rather acts as an addition – for example, oil did not substitute coal but was added on top of it. 

As well as addressing questions around policy, Hanieh also argued that solving the climate emergency requires seriously engaging with the ongoing use of oil by militaries around the world. 

Hanieh, a professor in political economy and global development at the University of Exeter, gave the third and final lecture in the ISRF’s series on decolonisation, delivered in partnership with Gresham College.

In the first lecture, Martin Thomas asked whether the world was remade by decolonisation. The second lecture in the series saw Julia Laite examine the colonisation of Newfoundland.