Neutral Italy and Mussolini in WW2: What does fascist Italy do with Libyan Oil money?

When will oil become big and utilized in Italian Libya? What does it change demographics to(details please). Didn’t a lot of Africans move there once oil was discovered in otl? Would fascist Italy focus on encouraging Italians from home and abroad or even other Europeans(I doubt fascist Italy allows non Europeans to come in legally)? Could oil bring in America business(like Saudi) and Italian Americans? Would they be US leaning but not a trustworthy ally? Wouldn’t oil turn Mussolini or leaders after him into a fascist Gaddafi? Didn’t Gaddafi use Libyan oil money to fund all types of revolutions and conflicts across the world? He was the only person I think funding Islamist and communist at the same time. Pretty sure he gave money to all anti-colonialist groups. Would Italian fascist leader fund right wing regimes abroad especially colonial powers with oil money? Doesn’t that greatly impact who getting money and resources? Didn’t many right wing regimes fail due to being more isolated from western capitalist economic systems? Don’t they survive if they have their own economic bloc(doesn’t have to be nearly as powerful. More like third bloc that west leaning but undemocratic and only sides with west against communist. They have to be taken into account but can’t stand toe to toe with either bloc).

Could the fascist use oil money to buy the support of Italian populations like Saudi and other oil rich regimes do with oil. Would oil money made from Libya be enough to greatly increase living standards in Italy if used to fund large public projects and luxuries? I wonder what that oil does for the Italian car industry? Will Mussolini and fascist spread its ideologies like Saudi and Gaddafi did? Does oil and being anti-communist(only important during Cold War not after if communism still falls) help the fascist regime survive much longer or until today? Could they be like Saudi where US looks the other way to stuff they do and Italy tries to avoid upsetting US too much?
 
"I spent a lot of money on booze, birds and fast cars. The rest I just squandered." - George Best.

Boringly enough, I think the money mostly gets spent on propping up the lifestyles of the fascist leadership, and then more on the military to help them stay in power.
 
Fascists had a fetish for big infrastructure projects, no?

They'd probably use it to prop up state-backed industries and subsidize certain cost of living expenses too. They'd likely wanna subsidize immigration to the colonies as well.

Saudi Arabia has 266,455,000,000 barrels of oil reserves and currently pumps out 3,818,000,000 a year.
Libya has 74,363,000,000 barrels of oil reserves and currently pumps out 366,000,000 a year. At their peak (1973) the Libyans were putting out 865,000,000 a year, so I'd say the Italians would be producing something closer to that (political instability isn't good for investment in your oil industry).
Italy has 557,000,000 barrels of oil reserves. I'm not sure what their annual production is.
Albania has 168,000,000 barrels of oil reserves. I'm not sure what their annual production is.

In an optimistic situation, the Italians are putting out 22% as much oil as the Saudis and have 28% as much in reserves. I'm not sure they could do much other than prop up some client states. I bet ENI could get some sweet sweet deals in Equatorial Guinea from Spain. Maybe the Italians can buy the colony from Spain or take it in exchange for debts the Spanish had after their civil war.

Equatorial guinea has 1,100,000,000 barrels of oil reserves, although it was only discovered in the 90s.

Italy + Albania + Libya + Guinea is 76,188,000,000 barrels of oil reserves.
 
You have to wonder how much the Italian economy would improve just from not having to go to a full war economy and for not being a battleground of larger powers too.
 

Marc

Donor
Assuming any production in the early 40's - extremely unlikely but not impossible - I wonder what happens when the Germans demand oil from Italy. Not a pretty situation for Mussolini to be...
More realistically, even assuming no North African campaigns, commercial production is likely to start only in the early 1950's. Frankly I doubt that the Fascists would last that long.
 
Fascists had a fetish for big infrastructure projects, no?

They'd probably use it to prop up state-backed industries and subsidize certain cost of living expenses too. They'd likely wanna subsidize immigration to the colonies as well.

Saudi Arabia has 266,455,000,000 barrels of oil reserves and currently pumps out 3,818,000,000 a year.
Libya has 74,363,000,000 barrels of oil reserves and currently pumps out 366,000,000 a year. At their peak (1973) the Libyans were putting out 865,000,000 a year, so I'd say the Italians would be producing something closer to that (political instability isn't good for investment in your oil industry).
Italy has 557,000,000 barrels of oil reserves. I'm not sure what their annual production is.
Albania has 168,000,000 barrels of oil reserves. I'm not sure what their annual production is.

In an optimistic situation, the Italians are putting out 22% as much oil as the Saudis and have 28% as much in reserves. I'm not sure they could do much other than prop up some client states. I bet ENI could get some sweet sweet deals in Equatorial Guinea from Spain. Maybe the Italians can buy the colony from Spain or take it in exchange for debts the Spanish had after their civil war.

Equatorial guinea has 1,100,000,000 barrels of oil reserves, although it was only discovered in the 90s.

Italy + Albania + Libya + Guinea is 76,188,000,000 barrels of oil reserves.
Wouldn’t Italy be more stable with oil money? Saudi is arguably just as oppressive if not more so then fascist Italy(peacetime) and they seem stable enough to have a lot of US business.
 
EUR really ain't that bad in terms of architecture. It's certainly more aesthetic than Brutalism, the western European alternative :p

At least there’s something gaudy to it. Something to it, unlike Brutalism, yes :p

But seriously I’d expect EUR to be a whole planned city center ITTL, hopefully with some over the top massive arenas for Mussolini to strut around inside for tens of thousands of people.
 
Bread and games.
Public works to bring "civilization" to the colonies and to employ the unemployed. Roads, railroads, big public buildings.
And, this being Fascism, armaments.
 

yourworstnightmare

Banned
Donor
First we need to establish if Italy can keep Libya. If there's decolonization all around, the Italians would probably face insurgencies of the worst kind in their colonial empire.
 
First we need to establish if Italy can keep Libya. If there's decolonization all around, the Italians would probably face insurgencies of the worst kind in their colonial empire.

Italians consisted of about 13% of the Libyan population in 1939. Maybe they could pump more men from rural areas, and possibly resettle Italians from Somalia, which imo was probably harder to keep. So, they could claim that most of Libya was Italianized and hence was part of Italy proper
 

Ian_W

Banned
Catch a bad case of the Dutch disease?

For those of you who don't know, the Dutch found a whole lot of hydrocarbons after the war - essentially the onshore parts of the North Sea fields.

The major effect was to raise the value of the Dutch Guilder, which crippled their existing export agriculture, electronics and so on economy.

The 'Dutch Disease' was therefore about how finding mineral wealth weakened your economy.

And, yeah, this would happen in spades if Fascist Italy had access to the useful but not world-changing Libyan oil.
 
For those of you who don't know, the Dutch found a whole lot of hydrocarbons after the war - essentially the onshore parts of the North Sea fields.

The major effect was to raise the value of the Dutch Guilder, which crippled their existing export agriculture, electronics and so on economy.

The 'Dutch Disease' was therefore about how finding mineral wealth weakened your economy.

And, yeah, this would happen in spades if Fascist Italy had access to the useful but not world-changing Libyan oil.
That’s more environmental mismanagement and stupidity then raw resources themselves. The issue with resources extraction is many groups often disregard the long term effects. If a oil rig, coal mines, and logging are poorly managed or given too much priority over other industries your economics are bound to fail hard when that market drops or you deplete it. Resource extraction, especially when technology improves, is not fully bad if you know how to properly do conservation and keep your economy diversified(Italy has other stuff. Also Libya has uranium. Maybe more depending how border with Chad is drawn). For example you can frack oil responsibly with the right regulations and precautions in place but without that people, businesses, and even governments don’t think about that or rather cut down on cost at the lost of safety and environmental management. The benefit Arab countries have is oil is often in middle of desert where many people don’t live(most oil is in the inland Libya and heart of desert right?). Resource extraction if done incorrectly risk polluting soil, water, and vegetation nearby which is especially bad if it’s a area with a lot of natural vegetation. It’s not good to pollute at all but it is much less noticeable in the desert where few live(especially if urbanization takes off). They just have to not be complete idiots and hit a water reserve underground or oasis and environmental damage isn’t too bad. Raw resources are useful to nations and development but many are just stupid with them a lot. They focus so much on that industry and disregard environmental damages so much they destroy much of their other industries both physically and economically. Most deserts in the Muslim world was worthless land until oil. You don’t have to worry about destroying agriculture there. Libya a settler colony. If they are majority Italian or European economy can function more like mainland Italy unlike Dutch example(they might not care about improving lives of Arabs there but actual Italians and Europeans are probably different story). Arab and Muslim countries extraction economy benefit from desert. And regardless of these regimes many flaws, they knew how to use this money to develop the country economically(not politically. The two don’t always go hand and hand). Look at Dubai or Saudi. They are using that oil to invest in other industries.
 

Ian_W

Banned
Look at Dubai or Saudi.i

I am looking at Dubai and Saudi, and the theme is "no existing competing industries and very few people to split the money between".

The specific problem with the Dutch Disease is that it makes it really hard to "keep your economy diversified" - the easy money from digging stuff out of the ground serves to push the value of your currency up, and then Phillips or Fiat or Leyland finds itself unable to compete for workers, capital or export markets.

For more detail, read Joseph Conrad's Nostromo.
 

nbcman

Donor
What Libyan oil money? Oil cost about a US Dollar a barrel in the mid to late 1930s. Cash strapped Italy probably couldn't afford the infrastructure required to extract it, pipe it to a port, ship the oil, and refine the oil. Saudi Arabia in 1940 only produced 727,000 metric tons of oil or 5,538,000 barrels - which is about .14% of their current production. Don't apply your understanding of current oil pricing and production to the 1930s.
 
Italians consisted of about 13% of the Libyan population in 1939. Maybe they could pump more men from rural areas, and possibly resettle Italians from Somalia, which imo was probably harder to keep. So, they could claim that most of Libya was Italianized and hence was part of Italy proper
Oil will bring in a lot of immigrants. They might be a lot of Europeans from other countries coming to Libya depending on Italian policy. Remember world war 2 had a great impact on population, demographics, and culture. So did decolonization. There are Italians in Tunis who can move there and possibly French immigrants if they Algeria still lose Algeria(they would be more right wing and many could feel betrayed by France). But I feel like in this pod Algeria might go three ways. It’s falls as otl, it becomes de facto apartheid French minority ruled state only supported by Italy(Italy fears what fall of Algeria could lead to), Italy and patch things up with France when Italy offer heavy military and economic support from Italy(fear of decolonization out weights more then any possible standing issues with France). Would Italy support be big during Suez crisis with them being in Libya. Fascist Italy might get on Brits and French good side by supporting them against complete decolonization. Gaddafi was using Libyan oil money to fund groups internationally. That could have major impacts in Africa especially with that oil money now going to South Africa, Rhodesia, and Portugal instead of the revolutionaries fighting them. A undemocratic bloc might just be a bunch of regimes supporting each other economically and politically. A more mutual bloc. When nations sanctions or condemn South Africa Italian and other similar regimes support undermines it. Italy keeps regimes alive by preventing a unified political and economic effort to stop western demands for democracy. Portugal, Spain, South Africa, Rhodesia, Italy, and maybe Greece too. Maybe a few countries in the Americas too? A Cold War BRICS?
 
Bread and games.
Public works to bring "civilization" to the colonies and to employ the unemployed. Roads, railroads, big public buildings.
And, this being Fascism, armaments.
In short, this.
With emphasis on the second part. Which is, by the way, what Saudi Arabia and the Emirates have been doing, to a large extent. For closer comparisons, i'd look at how Pahlavi Iran spent its oil revenue: modernization in general (especially infrastructure) and army gear as first priority, together with luxurious lifestyle for the top brass.
Unlike the Arab Gulf States, I don't see a lot of subsidy going to the general population just to bribe them into political acquiescence, though you might see some of that in a limited way. Another closer comparandum could be Algeria.
In general, I'd expect a lot of the revenue to be squandered into very visible pet projects with propaganda value, military expansion, and an awful lot of embezzlement and pocket-lining for the regime's high-ups, as opposed to invested in other revenue-producing endeavours: this is, in general, the pattern of most authoritarian oil-producers historically, after all.
 
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