V Day: remembering the victory of oil

World war 2 was the first, and God willing the last mechanized global conflict between great powers. Tanks, aircraft, jeeps and ships all run on oil. The anniversary of V day is a good occasion to reflect on the role of oil in victory.

At the beginning of the war Germany had access to around 150 thousand barrels/day oil primarily in Romania and Hungary. Those remained essential till the bitter end. The Ardennes offensive of December 1944 is a big item in Anglo-Saxon war mythology but during the same time more German tanks were deployed in Hungary, protecting the Hungarian oil fields that were originally developed by Standard Oil. Iraq which was conceivably within reach of Rommel and even had an anti - British revolt was producing around 100 thousand barrels/day mainly in Kirkuk, but that eventually remained in allied hands. Baku was a bigger prize, around 400 thousand. During the Stalingrad offensive, the Germans made it to the edge of the oil region, capturing Maikop. However, there is little doubt that the Soviets would have applied a ruthless scorched earth policy had the Wehrmacht got further, so probably this was a theoretical potential anyway. Japan did capture around 150 thousand barrels/day in present day Indonesia and Malaysia, but a very effective US submarine campaign mostly prevented its utilization.

How much combat power a barrel of oil could buy at that time? With the refining technology of the day, only a small proportion of the oil was converted to gasoline, half or more became heavy fuel oil, useful for large warships but not for land or air warfare. The Romanian and Hungarian upstream could have supported around 2-3 million liters/day gasoline supply. On a bad day in 1943 the USAAF alone used this much to send a thousand heavy bombers over Europe. An armored division needed around a 100 thousand liters daily if everything was quiet, the battle of Kursk was at least 15 million liters for both sides. The unlikely champion of energy efficiency was the Red Army, the lightweight diesel engine of the T34 gave around 200km longer range than other comparable tanks that mainly used gasoline, a major tactical advantage. In contrast, the first Sherman series were built with 5 standard Chrysler car engines which was a maintenance and efficiency nightmare, but well suited to the abundance of oil and existing assembly line mass manufacturing.

The insufficiency of European upstream sources was well recognized in pre-war strategy. Nazi Germany heavily invested into synthetic fuel production from coal with hydrogenation and pioneered the Fischer -Troops process. This was regarded to be such a potentially transformative technology that Standard Oil of New Jersey (Exxon today) bought the technology license for the rest of the world, giving 2% of its equity to IG Farben. Then Senator Harry Truman regarded this arrangement as “high treason’. In real life synthetic fuels proved to be difficult and expensive. The human cost was disregarded: the synthetic fuel plant in Auschwitz is a disturbing reminder of how the Nazi regime combined technological innovation with a complete lack of morality. However, even with totalitarian ruthlessness, it had massive demands on steel and engineering resources and was vulnerable to allied air attacks. Synthetic fuel could ramp up to around 120 thousand barrels/day, roughly the equivalent to half a million barrels/day conventional upstream if adjusted for refining yields but that was the end of the road.

While the German efforts on coal based synthetic fuels are widely discussed, what receives much less attention is the fact that during the war US oil production increased by over million barrels/day, from 3.5 to 4.7 million barrels/day, several times more than the German synthetic fuel industry. Decades of US import dependency blurred the memory, but in the 1940s American energy dominance was a description of facts rather than a twitter slogan. Overall, over 75% of all the fuel used in all the theatres of the war was produced in US oilfields. The evil genius of IG Farben proved to be no match for Texas and Oklahoma.

The allies also had an advantage in refining technology as well. The Spitfires of the Battle of England flew on Shell’s newly developed 100 octanes gasoline, providing better acceleration and sudden bursts of power than the 86 octanes normal gasoline of the Luftwaffe. The US oil industry pioneered and deployed catalytic cracking, leading to a much higher gasoline yield from an already more abundant oil supply. The US also had a much bigger scope to reduce civilian consumption as it was already a motorized society before the war.

The massive discrepancy in oil supply had major strategic implications. Colonel Hessler’s Tiger tanks running out of fuel just in sight of an American depo is a great scene of the iconic Battle of Bulge movie, but the real impact was probably in logistics. The Wehrmacht entered the Soviet Union with 3000 tanks and half a million horses: there was never enough fuel for truck based logistics. As a result, despite the Blitzkrieg tactics, the average speed from Poland to Moscow was not faster than what Napoleon achieved on the same route. In contrast, the allies had previously inconceivable logistical options. Several thousand airplanes were flown from American factories to the Eastern front hopping through Alaska and Siberia, each burning around 10000 liters along the way. Tens of thousands of American trucks and jeeps were simply driven from Middle Eastern ports to Soviet central Asia and continued on Baku oil towards Berlin. At a decisive moment in the battle of Stalingrad, Zhukov suddenly moved 3000 heavy guns forward by a hundred kms in harsh winter conditions, a feat which would have been inconceivable without a horde of diesel tractors. In both the East and the West, the allied armies were better motorized and supplied by the day.

Oil was the key energy source of the 20th century so it is perhaps not surprising that it played such a decisive role in the key geopolitical conflict of that time. Today the age of oil is slowly drawing to an end and we are witnessing the dawn of the age of renewable electricity. However, history is not over. Geopolitical rivalry is very much with us, hopefully this time with a less murderous result than 70 years ago. One thing is for sure, energy supply and energy technology will continue to be a key component of geopolitical power and will shape strategy and international relations for years to come.