(Report to the May 2025 general meeting)

In the clash between oil cartels for control of the market, we still find all the typical characteristics of the era of imperialism, repeatedly emphasized by our current and summarized during World War I, in 1916, by Lenin.

Global demand for oil continues to grow steadily, driven by emerging capitalist economies (young blood for capital accumulation), such as China and India, while supply has fluctuated due to geopolitical factors (sanctions on Russia, conflicts in the Middle East) and technological factors (shale extraction in North America).

On the market, alongside countries with high-consumption economies that are largely dependent on imports, others have high reserves but relatively modest economic activity, unable to consume all their oil. Countries with high consumption and low production are China, India, and Europe.

In capitalism, technology advances not to “save the planet” but so that monopolies can obtain superprofits from the slavery of millions of people.

Currently, with demand showing no signs of recovery, we are witnessing a structural oversupply, similar to that during the 2014-16 crisis. Production now tends to exceed demand. This has had its most obvious origin in the cultivation of shale in North America (fracking), the entry into the market of Guyana’s production, and the changes undertaken by OPEC+, which has announced its intention to break with its policy of production cuts.

Global refining capacity has increased, but profit margins have declined in 2024. Stocks remain relatively high: the United States, Europe, and China have accumulated them, taking advantage of low prices. Venezuela has the largest reserves in the world; Saudi Arabia and Russia have enough for 50-60 years; the United States for 20-30 years.

Price volatility responds to capitalist crises and wars, reflecting market anarchy and inter-imperialist conflict. Market speculation is triggered by specific announcements and sanctions: the US is imposing severe sanctions on Iran and Venezuela and announcing secondary tariffs for buyers of Venezuelan, Iranian, and Russian oil. The US government had decreed Chevron’s exit from Venezuela, but Chevron did not comply in order not to cede ground to competing cartels (China).

The US government pressured the Saudis to increase supply and reduce prices, making it easier for the Federal Reserve to cut interest rates. But the drop in prices below $65 is forcing US fracking companies to cut investments and close marginal wells. Shale companies are already heavily indebted. There is tension between the oil lobby and large consumers (IT, airlines, Amazon, Tesla).

Inter-bourgeois contradictions in the US are intensifying and projecting themselves onto the international stage.

Although monopolies occasionally make agreements with each other, the struggle and competition are not abating but intensifying in new forms. We have seen this in the history of OPEC and more recently in OPEC+. In 2023, Saudi Arabia (an ally of the United States) and Russia (one of the BRICS countries) agreed on production cuts, but they compete on Asian markets.

Today, if we update the list of the “seven sisters” in the West, we find large companies that dominate the global oil business, both state-owned and private giants.

In general terms, the big oil companies are associated with the various imperialist powers and are defended by the diplomacy and weapons of their states.

OPEC, which supplies 40% of world production and regulates prices by limiting production.

However, the United States, with 18% of global production, mainly from shale, acts as a counterweight, weakening the cartel. But the release of large quantities of North American oil onto the market contributes to overproduction and falling prices

War follows the economy. The rearmament of states is also financed by oil revenues. Capitalism turns oil into blood and blood into profits. War is inevitable as long as monopolies exist.

The interests of the states and corporations that control oil reserves and production are intertwined with those that depend on them for supply: although in conflict, both depend on each other, closely linked by the accumulation of profit.

The preference of some states for the nationalization of their reserves, extraction, refining, and marketing still responds to a capitalist model, which continues and does not emancipate itself from subjugation to national and international monopolies through financial, commercial, and technological mechanisms.

Areas of influence and control are already being established. The United States occupies 90% of the eastern oil fields (Deir ez-Zor) in Syria, while in the Persian Gulf and the Red Sea, five US aircraft carriers patrol the routes where 20% of the world’s oil flows.

The conflict between Israel and Iran last June triggered an initial surge in oil prices. However, they quickly returned to previous levels once a ceasefire was announced and the absence of serious supply disruptions was confirmed.

The United States maintains bases in the Middle East to control the oil fields. In Africa, China extracts 10% of the continent’s oil (Nigeria, Angola), competing with the French (Total) and British (BP). In Latin America, nationalizations in Mexico (Pemex) and Venezuela’s struggle for the Essequibo territory clash with Exxon’s interests.

With the weakening of Iran, Hamas, and Hezbollah, the new Syrian government, more aligned with the United States and Turkey, and recent agreements between the United States and Saudi Arabia, the major Western oil companies (ExxonMobil, Chevron, BP, Shell) are strengthening their control over the regional market, while Russia and China see their influence and access to new projects limited, despite maintaining their positions in Iran and Iraq. The correlation of forces favors the United States and its Gulf allies, reducing the capacity of Russia and China.

But today, the BRICS (Brazil, Russia, India, China, South Africa, Egypt, United Arab Emirates, Iran, Ethiopia, Indonesia) control 43% of world oil production and NATO (United States, Canada, Norway) 25%, partly thanks to fracking technology. But this division of the world is constantly changing.

The inter-imperialist clash thus shows different oil-rich theaters of operation, until the economic and commercial dispute escalates into general war.

In the Middle East, global tensions are expressed in the opposition between Iran and the United States/Israel. Saudi Arabia, a key ally of the United States, competes with Iran for regional hegemony. The “12-day war” does not put an end to this confrontation.

In the eastern Mediterranean, Turkey is challenging Greece, Cyprus, Israel, and Egypt over gas fields. NATO is divided (the United States supports Greece, but Turkey is a member).

Instability in Iraq and Syria: the presence of US, Russian, Turkish, and Iranian troops creates friction. Jihadist groups could be used as proxies.

In Libya, Russia, through the Wagner Group and Haftar, opposes Turkey/US/EU, which support the Tripoli government, for control of Africa’s largest oil and gas fields.

In the Sahel and the Gulf of Guinea, France (and the EU) is losing influence to Russia (Wagner mercenaries) and China. Jihadist attacks could be a pretext for foreign intervention.

In Mozambique, rich in natural gas, armed conflicts are underway for control of the mega-gas fields in Cabo Delgado (TotalEnergies, Exxon, China).

In Eastern Europe, Russian gas is at stake. In Ukraine, as an extension of the current conflict, NATO could intervene directly. Poland and the Baltic states are hot borders.

Energy corridors pass through Azerbaijan, which is in conflict with Armenia. Turkey and Russia are vying for influence in the Caucasus. The TAP is crucial for Europe.

In Latin America, the United States is resisting China and Russia. In Venezuela, Russia and China have strategic investments in partnership with PDVSA. There is offshore oil in Essequibo, hence the tensions between Venezuela and Guyana, supported by ExxonMobil and the United States.

In the South China Sea, China is opposed by the United States, the Philippines, and Vietnam over shipping routes and gas fields. A Chinese naval blockade would affect 60% of the world’s energy trade. In Taiwan, in the event of an invasion by China, the United States could intervene by disrupting chip and energy supply chains.

The dynamics of inter-imperialist contradictions over control of the oil business only confirm the positions of communists: monopoly domination, fusion of banks and industry; endless local wars.

On the other hand, monopolies create the basis of communist society, an enormous advance in the socialization of production and technical innovation. But in the capitalist regime, social production increasingly opposes private appropriation based on capital, wage labor, and exchange value.

Opportunists try to deceive the workers’ movement with their calls for the defense of the national economy, sovereign control of oil fields and trade, and the demagogic utopia of multipolarity, dreaming of a capitalism in which cartels and monopolies compete peacefully with each other. Perhaps in an “ecological” way, “respectful of the planet.” In this way, they seek to mask their preparations for a new violent partition of the world.

The world proletariat, under the leadership of the International Communist Party, will be able to reject these deceptions and open the way to history. Through its class struggle, it will transform its defensive economic struggles into a political struggle for power: a new war of the workers against dying world capital.