Public Interest, Private Profits: Multinationals, Governments, and the Coming of the First Oil Crisis

The oil industry offers a unique take on the relations between public powers and private enterprise. For almost thirty years after the end of the Second World War, advanced capitalist countries delegated management of an increasingly relevant part of their energy supply to big oil multinationals. The companies not only took care of the production and commercial aspects of the industry, but also played a major role in dealing with producer governments, as quasi-sovereign entities. This paper focuses on the relationship between oil multinationals and governments in major oil consuming nations in a moment of change. After the Libyan revolution in 1969, the OPEC countries opened a cycle of negotiations with oil companies on oil prices that culminated in the Tehran and Tripoli agreements of spring 1971. The companies were in charge of these negotiations. Relations with consuming governments came under a severe strain. The public in oil consuming nations, fearful of being ignored by firms more interested in protecting their profits, became increasingly wary of companies' guardianship of their welfare, and many voices were raised to demand that governments step forward to defend the public interest. This paper will evaluate how much and in which sense the crisis of the early 1970s changed consumers-companies relations.