About two years ago, I met an artist who equated contemporary capitalism with imperialism through quirky wall hangings embroidered with national flags and logos of the world’s most valuable companies. Having examined the pattern, which included familiar names like Shell, Apple, and Microsoft, I asked her where she’d placed Aramco. I half-expected the blank look I received in response. “Saudi Aramco is more valuable than the top three Fortune 500 companies combined," I explained.

The rankings of corporations put out in eagerly anticipated annual surveys (as well as their functional transparency) depend on the companies being publicly listed. Some of the world’s most important firms operate entirely outside the public spotlight, as also beyond the radar-range of critiques that equate contemporary capitalism with imperialism.

I will come to imperialism in a bit. For the moment, let’s stick with Aramco. Since my conversation with the artist, the petro giant’s value has plummeted along with plunging oil prices, so much so that it is considering selling a stake in subsidiaries to raise funds. Aramco will not offer shares in its core business, for that might force it to disclose how much money it gifts the royal clan.

While the decline in prices has been painful for sellers of crude, it’s great news for nations that import the commodity. It turns out, though, that there can be too much of a good thing. Oil price levels are a bit like weight watching. We don’t want to gain kilos, and feel happy to shed a couple, but a quick, sharp drop is reason for worry rather than excitement; it’s an indicator of serious illness. The oil price plunge suggests the world’s economy might be seriously ill, and that’s bad news even for those benefiting from low petroleum prices. (It’s another matter that Indians have felt few of those benefits, thanks to over a dozen excise duty hikes by Monsieur Jaitley.)

A sound plan gone wrong

Perhaps prices would have dropped anyway, regardless of any decisions individuals and nations took. However, the trigger for the drop as it happened can be traced to a decision by Saudi Arabia to preserve market share rather than attempt to shore up prices. The strategist behind that fateful decision was Saudi Arabia’s long-time oil minister Ali Al-Naimi. As Al-Naimi explained in a rare candid interview with the Middle East Economic Survey, high prices had spurred investment in new technologies like fracking and in expensive wells. Since Saudi Arabia was the world’s lowest-cost producer, Aramco could stay profitable at prices that would beggar the frackers as well as other high-cost producers like Russia. Once investment in new exploration collapsed, prices would rise again, and Saudi Arabia would be the healthiest of the oil producers still standing. Al-Naimi’s ruthless logic remains unimpeachable, but I doubt if he anticipated such a prolonged rout, driven by increased efficiency in fracking, a slowdown in global demand, and the détente between the United States and Iran that has permitted entry of Iranian oil into an already flooded market.

While low oil prices might affect the environment adversely by slowing the drive towards renewables, I believe it’s good for geopolitics. Oil wealth induces bad behaviour. This is where the history of imperialism comes in. Back in 1953, the United States notoriously overthrew the democratically elected government of Mohammad Mossadegh after he nationalised Iran’s oil. That act, and many others before it, created the narrative that the US was out to control the world’s oil supply. The narrative was absolutely justified at the time, but what followed in the decades after the coup d’état in Iran was a wave of nationalisations across the Middle East. The United States abjectly failed in what it set out to do in 1953. Mossadegh won.

Going to war

The narrative about controlling the world’s oil supply was so firmly embedded in public discourse, however, that it never went away. It was resurrected with every conflict in the Middle East, down to George W. Bush’s war against Saddam Hussein. If that war was about control of oil, it failed even more quickly than the Central Intelligence Agency's 1953 Iran misadventure. The United States not only got no oil from Iraq, it spent so much fighting that war that it blew a hole in its budget bigger than Saddam’s ego. Somehow, activists manage to blame George W. Bush for two mutually exclusive crimes: responsibility for ballooning debt as well as conduct of a mercenary war.

If control of oil supplies has not been the crux of American interventions in the Middle East, it’s nevertheless helped set the stage for those conflicts. Bolstered by a secure revenue stream, Muammar Gaddafi interfered in the affairs of neighbours like Chad and even funded the Irish Republican Army. Saddam Hussein first invaded Iran to grab some of its oil. When a ceasefire was finally agreed, the Iraqi leader found crude prices weren’t high enough to repair quickly the damage wrought by eight years of war. He threw a hissy fit against some fellow OPEC members and invaded Kuwait to teach that nation a lesson, a mistake that brought on an American response. Each stage in the history was conditioned by black gold, but not by an American desire to own the Middle East’s supply of the commodity.

The story of oil-influenced bad behaviour continues in the present day. Saudi Arabia has spent billions spreading a vicious ideology directly linked to the growth of jihadi terror. Vladimir Putin may have had fair justification for annexing the Crimean peninsula, but over-reached in Eastern Ukraine and now blames Lenin for it. Six decades after the overthrow of Mossadegh, it is apparent that if Anglo-American control of oil production was deleterious, nationalisation has created its own equally nasty set of problems. The imperialists were replaced not by neo-colonialists but a bunch of unbalanced nationalists. Some kept their own populations sedated and infantalised by distributing enough of the oil revenues, but they didn’t transit into modern democracies with complex economies. When revenues from oil dry up, as they will at the end of the next shock though not at the end of the current one, citizens of a number of Middle Eastern nations will realise exactly how little of permanence was gained in the decades when trillions of dollars flowed into their economies. And they will have only themselves to blame. And though the economies of these nations will shrivel, the world will become a safer place when the likes of Saudi Aramco no longer find place among the world’s most valuable companies.