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

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 frist 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.
Even if it isn’t in the mainland as much could Libya become like the Italian promise lands. Italians and Europeans there are given such nice standards of living by government oil money and public projects to make them more loyal and willing to put down Arab resistance when asked? Also would Italy like invest a lot more in tourism industry. Most oil authoritarian regimes are hindered greatly by religious and cultural beliefs on that. Would Mussolini or his successor invest in creating resorts, gambling, prostitution, drinking, and anything else that would attract wealthy people to Libyan coast? After Mussolini dies and Italian American businessmen go to Libya to make money I could see the mafia rising again like otl and possibly with US support(to undermine the fascist or influence Italian politics. Also corruption will be high so then coming back isn’t unlikely when a more “moderate” leader takes power). Italian population in US and US possible heavy investment in the Italian oil industry on the Americans part might eventually lead to very close tied. Imagine US and Saudi relations but with a lot more public support(Italian Americans and possibly mafia too after Mussolini)
 
Another thought: the board's near-consensus, which I happen to agree with, is that in the event of a neutral Fascist Italy with a WWII otherwise as close as possible to OTL, postwar Italian East Africa will see continued or resumed insurgency, at least in parts of former Ethiopia. The model is roughly the one of the Portuguese colonies, and I believe it is a reasonable guess to imagine a vaguely similar situation.
Ethiopia is mountainous, a quite a good guerilla country, with long land borders with places that can be expected to be somewhat sympathetic to Ethiopian insurgents. So it's likely that this turns into a running sore.
Fascism being Fascism, it unlikely that Rome is going to allow decolonization unless forced to (which it will probably be at some point) for quite a while and the military response would likley be at least at Portuguese Angola levels (so: nasty).
Now, how does Libyan oil enters this equation? I can see a lot of oil revenue being pumped into financing the military counterinsurgency effort (and/or bribing some insurgents into loyalty) thus further increasing the military's share.
At the same time, the Fascist Party will slowly but surely stuff the military with its own cronies (as opposed to the older officer corps). The Italian army would quickly turn into a bloated, corrupt and cruel mess...
No "carnation revolution" here if the army controls a huge share of oil revenues flow.
 
Even if it isn’t in the mainland as much could Libya become like the Italian promise lands. Italians and Europeans there are given such nice standards of living by government oil money and public projects to make them more loyal and willing to put down Arab resistance when asked? Also would Italy like invest a lot more in tourism industry. Most oil authoritarian regimes are hindered greatly by religious and cultural beliefs on that. Would Mussolini or his successor invest in creating resorts, gambling, prostitution, drinking, and anything else that would attract wealthy people to Libyan coast? After Mussolini dies and Italian American businessmen go to Libya to make money I could see the mafia rising again like otl and possibly with US support(to undermine the fascist or influence Italian politics. Also corruption will be high so then coming back isn’t unlikely when a more “moderate” leader takes power). Italian population in US and US possible heavy investment in the Italian oil industry on the Americans part might eventually lead to very close tied. Imagine US and Saudi relations but with a lot more public support(Italian Americans and possibly mafia too after Mussolini)

I doubt there would be a lot of Arab (armed) resistance. It had been brutally crushed by 1933 already, and a few Arab groups co-opted. The future of the Arab (armed) opposition, when it eventually re-emerges (as it likely will, because grievances won't go away, and peaceful resistance/civil disobedience will not make anyone heard by a Fascist leadership) may resemble more OTL's Trouble's era IRA than Viet Minh or even the Mau Mau.
Investment in some sort of luxury economy will come, but that would also breed resentment.
 
And of course, huge oil revenue will help financing something awfully expensive that an Italian Fascist regime will surely want to do in due course if they can: a military nuclear program.
 
And of course, huge oil revenue will help financing something awfully expensive that an Italian Fascist regime will surely want to do in due course if they can: a military nuclear program.
Libya does have uranium and resources for the weapons. Would Italy pressure independent Chad for concessions of its northern border lands that have uranium?
 
Libya does have uranium and resources for the weapons. Would Italy pressure independent Chad for concessions of its northern border lands that have uranium?
It seems that exploiting surveyed uranium deposits in northern Chad is a very recent prospect, though they were known to be there since the 1940 it appears. So perhaps they are not that simple to use cheaply.
However, Tibesti-Bourkou (northern Chad) was intermittently desired by Fascist Italy, and it is an area that Italy can indeed get during alt-WWII through neutrality if Mussolini feels so inclined (as a price for neutrality) for example. Failing that, if there are known uranium reserves Italy would certainly try to pressure either France or Chad (or whatever African country emerges in the area) in order to acquire the territory or at least establish some presence. If it is successful I cannot say, but as it was in the target list IOTL...
 
I'd say that the Aouzou strip would have been incorporated by a non-Axis Italy into Libya on the basis of the 1935 agreement with France.
That's a possibility too.
But a POD in 1935 may butterfly the entire WWII (Stresa front holding, maybe Hoare-Laval agreement over Ethiopia, weird as it may seem, Anschluss a lot more difficult, no Mussolini's brokering at Munich...)
 
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?

Libya was sparsely enough populated then (population of less than 900,000 in 1939, 10% of whom were already Italian) that it is probably the only place in North Africa where a European colonizing majority could take place. Certainly if the Italians hold onto it, less Italians die in WWII (if they are neutral), the Fascists heavily invest in both infrastructure and emigration (and unlike the French, Italians were willing to immigrate in the millions in the century before WWII - just have them all go to Libya instead of America or Argentina or even Algeria). What would a basically European (and Christian majority) country, rich in oil, sandwiched between Egypt (the largest Arab nation) and Algeria (who still eventually go through a bloody war with the French and kick the Pied-Noirs out) face by the sixties, especially with the rise of Arab nationalism under Nasser in Egypt?
 
What would a basically European (and Christian majority) country, rich in oil, sandwiched between Egypt (the largest Arab nation) and Algeria (who still eventually go through a bloody war with the French and kick the Pied-Noirs out) face by the sixties, especially with the rise of Arab nationalism under Nasser in Egypt?

Almost certainly some degree of urban terrorism. Maybe just low-level, but not necessarily. ASALA managed to cause quite a headache for the Turks without any kind of population base in that country, so even a minority Arab population should be capable of getting something off the ground.
 
Fascist Italy would use that money in a desperate bid to try to keep their economy afloat. Being Italian fascists it wouldn't be used very efficiently.
 
It seems that exploiting surveyed uranium deposits in northern Chad is a very recent prospect, though they were known to be there since the 1940 it appears. So perhaps they are not that simple to use cheaply.
However, Tibesti-Bourkou (northern Chad) was intermittently desired by Fascist Italy, and it is an area that Italy can indeed get during alt-WWII through neutrality if Mussolini feels so inclined (as a price for neutrality) for example. Failing that, if there are known uranium reserves Italy would certainly try to pressure either France or Chad (or whatever African country emerges in the area) in order to acquire the territory or at least establish some presence. If it is successful I cannot say, but as it was in the target list IOTL...
Honestly, if Chad is unstable enough or under a brutal dictator(excuse by Italy to west. They care less about how brutal the Chad regime is) could Italy invade them rather easily? They take the land and put in power a puppet ruler? Chad is in heart of Africa I imagine help is harder to get and less likely(powers might be worried about other stuff). Italy might not be most competent military but they probably do a much better job at invading Chad then Gaddafi.
 
Almost certainly some degree of urban terrorism. Maybe just low-level, but not necessarily. ASALA managed to cause quite a headache for the Turks without any kind of population base in that country, so even a minority Arab population should be capable of getting something off the ground.
Depends how Arab nationalism develops which without Gaddafi and Libya could fail worse then otl which still leads to extreme Islamist becoming as big or bigger then otl. Nationalist might not be most peaceful group but they are lot easier to deal and reason with then religious fundamentalist. Italy and Mussolini probably wants to crush or discredit Arab nationalism once it takes off and they are position to hinder them greatly. Italy weakens the Arab dominance over oil market. If a nation doesn’t like Arab monarchs or dictators(or they dislike them) they can go to Italy for oil if they don’t mind fascist(this might become very prevalent if communist threat eventually fades and extremist Islam still becomes big). Mussolini might have tried to work with Muslims and Arabs in the past but point of possible conflicts are too high and they will probably not willingly assimilate or integrate into Italy. Italy holds Libya and will likely help Britain and France in Suez crisis(probably a big game changer since Italy isn’t ravaged by war and probably a great power but not a superpower. Italy can easily act in these areas militarily in variety of ways if they have enough international support or indifference). Italy also likely to help France in Algeria. They might be reaching Israel levels on how much some Arabs and Muslims hate them if they support neo-colonial policies in the region. Mussolini also might be very friendly with Israel after war for a few reasons. He might have “helped” them during war by letting many escape from Nazis(good propaganda tool to get a lot of Jewish support. The other big reason might be Mussolini and Italy trying to make it clear to everyone after the war fascism and Nazism are different. This could involve Italy supporting Israel heavily(“we aren’t like Hitler and Nazis. We are different we don’t want to kill Jews like him. We support Israel and the Jewish people” mindset). Also they have common enemies.
 
Honestly, if Chad is unstable enough or under a brutal dictator(excuse by Italy to west. They care less about how brutal the Chad regime is) could Italy invade them rather easily? They take the land and put in power a puppet ruler? Chad is in heart of Africa I imagine help is harder to get and less likely(powers might be worried about other stuff). Italy might not be most competent military but they probably do a much better job at invading Chad then Gaddafi.

Setting aside the point that the POD is such that there is no necessity to assume "Chad" is ever a country ITTL, let's assume it is. In that event, I suppose that the international climate would be key, especially what France thinks. In purely military terms, I suppose that an Italian Fascist state that is well established in Libya might successfully invade Chad... but what happens after that is very open.
Annexing northern Chad is a possibility (not a gven), taking over the whole place likely not.
 
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.

But Italy was Energy Poor, and a couple embarrassing failures with hydro power- still relies on imported coal. Domestic Oil helps with shipbuilding and piplines for distribution, along with rail and trucks.

If Oil was worth so little, one wonders how Rockefeller got to be the richest man in the World with Standard Oil.
 

nbcman

Donor
(1)But Italy was Energy Poor, and a couple embarrassing failures with hydro power- still relies on imported coal. Domestic Oil helps with shipbuilding and piplines for distribution, along with rail and trucks.

(2)If Oil was worth so little, one wonders how Rockefeller got to be the richest man in the World with Standard Oil.
(1) Italy was also cash poor and their industries ran on coal in the 1930s. How would they pay to develop all that infrastructure assuming they would even know where to look for the oil.

(2) Because Rockefeller didn't make his money by extracting oil. He made his money by refining oil (at one time Standard Oil controlled 90% of the world's refining) and shipping oil products before he diversified into other fields such as iron/steel. And oil was more expensive per barrel in 1870 (USD 3.86) than 1940 (USD 1.02).
 
(1) Italy was also cash poor and their industries ran on coal in the 1930s. How would they pay to develop all that infrastructure assuming they would even know where to look for the oil.

(2) Because Rockefeller didn't make his money by extracting oil. He made his money by refining oil (at one time Standard Oil controlled 90% of the world's refining) and shipping oil products before he diversified into other fields such as iron/steel. And oil was more expensive per barrel in 1870 (USD 3.86) than 1940 (USD 1.02).

They were looking, and were not far off from putting a test rig in the right place OTL.

2nd, look to the US example. The US West Coast was also energy poor at first, with having to import coal, no Wyoming Coal.in the 1880s.
However, after oil was discovered, industry switched to that as they could, locomotives became oil fired, and so on.

The need to support that new oil industry also increased manufacturing across the board, far more than coal did.

This fits in very well with the Fascist drive for Autarky, and to build up manufacturing.
 

nbcman

Donor
They were looking, and were not far off from putting a test rig in the right place OTL.

2nd, look to the US example. The US West Coast was also energy poor at first, with having to import coal, no Wyoming Coal.in the 1880s.
However, after oil was discovered, industry switched to that as they could, locomotives became oil fired, and so on.

The need to support that new oil industry also increased manufacturing across the board, far more than coal did.

This fits in very well with the Fascist drive for Autarky, and to build up manufacturing.
When did the test rig go in? According to this, the earliest real oil exploration in Libya didn’t start until maybe 1935-7. Assuming they got lucky in 1937, that’s a lot of infrastructure in Libya and Italy to be built in 3 years.
 
When did the test rig go in? According to this, the earliest real oil exploration in Libya didn’t start until maybe 1935-7. Assuming they got lucky in 1937, that’s a lot of infrastructure in Libya and Italy to be built in 3 years.

In other Italy/earlier Oil threads, I put forward it takes them roughly 8 years to have enough infrastructure to get it to where it could be shipped, and for refineries, using a US '40s rule of thumb, 4 years and $1M USDper 1000 bbl/day processing capacity, larger plants don't take much longer to build, just more expensive.

US Wildcatters in the Panhandle were sinking rigs to the depth needed in the late '20s, the Majors could go deepers

So it's mostly a matter of Luck. With US oilmen&surveyors assisting them, rather than the Moose telling them to get out of Libya, would add to it not being so reliant on Luck

In 1924, Sinclair Oil did a deal the Italian Government for joint exploration with a new Italian Company, Azienda Generale Italiana Petroli (AGIP) for a 50 year contract for assisting them with exploration and development, with enough bribes to the leading Fascists to make this happen.
Recall, there were the same guys behind Teapot Dome. This was at the expense of another Italian company, the ItaloAmerican Petroleum Society (SIAP), that was pretty much a Front for Standard Oil

Anyway, they soon fell out, Sinclair left, S_O left, and The Moose had his local 'experts' continue the search.

Change some things on how the Moose felt towards large American Corporations(Ford was also a target) and Italy could get large amounts of Oil flowing by 1940, no ASBs needed.
 
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