In Extractive Capitalism, here’s how Laleh Khalili explains today’s energy crisis

One answer is that the system has been built to function this way. In Extractive Capitalism: How Commodities and Cronyism Drive the Global Economy, Laleh Khalili, professor of Gulf Studies at the University of Exeter, UK, shows how, behind the visible infrastructure of barrels, tankers, ports and shipping lanes, lies what might be called a carbon-industrial complex — not her formulation, I am borrowing from Eisenhower’s military-industrial complex — that binds together energy producers, governments and financial institutions. The result is a system that concentrates wealth in the hands of a few even as its costs are borne by the burgeoning working class, that is, the “seafarers on the container ships which carry our products who are then abandoned at sea by shipping firms, made invisible while we use their cargo.”

Extractive Capitalism is not about the Strait of Hormuz in particular but it makes for essential reading at a time when it is increasingly clear that the world economy is organised around such choke points and the state control over the movement of energy. Khalili has previously written Sinews of War and Trade: Shipping and Capitalism in the Arabian Peninsula, which examines the region’s oil and shipping industries, and The Corporeal Life of Seafaring, which draws on her own experiences to shed light on the realities of maritime commerce in the modern world.
Extractive Capitalism is not a very long read and its brevity is part of its strength. Structured across 14 chapters, it refuses to confine itself to a single commodity, region or set of actors. Khalili opens with the world of oil, laying out the uneven distribution of wealth and power that defines it. But she also ventures beyond oil. One chapter, for instance, is partially devoted to sand, tracing its emergence as a commodity in its own right.

The central figure in that chapter is Aristotle Onassis, among the most influential business magnates of the 20th century, who possessed one of the world’s largest privately owned shipping fleets. Onassis attempted to break Aramco’s (now Saudi Aramco) dominance over oil transportation. Yet, as Khalili shows, a disparate coalition ranging from the US and the UK to a rival Greek shipping tycoon came together to cut him down to size. Ultimately, European and American jurists ruled against him, restoring what Khalili describes as the “supremacy of the Western oil companies.”

LPG Tanker Shivalik (Credit: PTI)

One reason why the book is compelling is its seamless blending of the historical forces that have shaped the modern world with the events unfolding today. Khalili, an Iranian-American, notes that oil was a constant presence in her life growing up in Iran. The 1953 Iranian coup d’état, engineered by the US and the UK after prime minister Mohammad Mosaddegh decided to nationalise the Anglo-Iranian Oil Company, set in motion a chain of events that culminated in the 1979 Iranian Revolution, which in turn laid the foundations of the ongoing war. Even the Iran-Iraq War (1980-88) can be traced in part to Saddam Hussein’s attempt to exploit Iran’s post-revolutionary turmoil and seize the oil-rich territory.

But Khalili’s point is that great-power politics cannot be seen as the sole engine of global transformation. Revolutionaries and striking oil workers, trade unionists labouring in hazardous petrochemical plants, and indigenous communities whose lands and sovereignty are violated by mining projects and pipelines matter just as much as the oil companies, financiers and governments that profit from the success of extractive industries.

Two chapters in particular merit attention. The first examines the Chagos Archipelago, for two reasons. One, Iran reportedly tried to target just a few days ago the US-UK military base on Diego Garcia, the archipelago’s largest island. Two, the UK has recently agreed to transfer sovereignty of the islands to Mauritius. In this chapter, Khalili traces a continuum — from the extractive practices of colonial powers such as France and Britain, including slavery and indentured labour, to the postcolonial militarisation of the archipelago.

The other chapter of note is the book’s concluding one, ‘The World Burns: The Red Sea Attacks.’ Here, Khalili explores the military and political consequences of maritime attacks and blockades carried out by the Houthis, an Iran-backed militant group in Yemen. She also shows how technology is reshaping the nature of conflict. During the Iran-Iraq War, both sides typically targeted ships lifting oil from Gulf terminals. Today, however, readily available data on ports of origin, transit routes and destinations can be used to identify and strike targets.

Khalili also dedicates an entire chapter to commodity traders because, as she argues, anything extracted from the earth can be commodified, and “commodity traders are crucial cogs in the machinery of extractive capitalism.” The subsequent chapter turns to insurance companies and even piracy. There is also a chapter on China — inevitable in any account of extractive capitalism. Khalili argues that in the Belt and Road Initiative, the structural asymmetries of extractive systems are clearly at work, shaping “the relationship between those who work in the mines and on infrastructures and those who profit from their labour.” Questions of climate change and environmental degradation, too, are woven into her larger analysis.

Extractive Capitalism, therefore, is for anyone seeking to understand the interplay of conflict, oil companies, shipping lanes and fluctuating prices at the petrol pump. As India and the rest of the world stare into the abyss of an energy crisis catalysed by war in West Asia, the book offers a valuable lens on what unfolds behind the scenes. Its conclusion is definitive: oil and the systems that move it remain the lifeblood of the global economy.