Oil and the Marshall Plan

Painter, David S.

doi:10.2307/3114553

Cited by 23 publications

(15 citation statements)

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“…The other segment was composed of countries with “soft” currencies and short of dollars, namely a large part of Western Europe, South America and the sterling area (i.e., either British colonies and protectorates or members of the Commonwealth). This pattern was not without implications for the currency denomination of oil imports (see Mendershausen ; Painter ; Schenk ; and Galpern ).…”

Section: Empirical Frameworkmentioning

confidence: 99%

“…This reflects the fact that a larger proportion of high-value-added products, including practically all lubricating 22 The share of the dollar actually declined between 1947 and 1953, from 48% to 38%, for three reasons. First, US oil companies tried to "sterlingize" their oil exports to Europe to address the dollar shortage in the run-up to the so-called "New Look" agreements of 1953 (see Painter 1984;Schenk 1996;Galpern 2009 (Schenk 1996). Non-dollar = imports paid in sterling by European countries + 70% of sterling area's imports.…”

Section: Overviewmentioning

confidence: 99%

“…Ensuring that the provision of dollars through the Marshall Plan would suffice for this purpose would help Western Europe secure the energy it needed for recovery. Providing adequate dollars for European petroleum imports would also help maintain markets for US oil companies when their potential customers would otherwise have been unable to obtain dollars (Painter ). This was no small consideration for a US‐dominated Marshall Plan administration.…”

Section: Datamentioning

confidence: 99%

“…They were not interested in accumulating inconvertible blocked currencies that could be used to pay salaries and purchase supplies only in the oil‐importing country itself. UK companies, in contrast, may have been willing to take sterling and dollars insofar as they had sterling‐denominated costs but also sought to purchase US oil equipment, technology and tankers, again typically using dollars (Painter ).…”

Section: Datamentioning

confidence: 99%

“… The share of the dollar actually declined between 1947 and 1953, from 48% to 38%, for three reasons. First, US oil companies tried to “sterlingize” their oil exports to Europe to address the dollar shortage in the run‐up to the so‐called “New Look” agreements of 1953 (see Painter ; Schenk ; Galpern ). Second, European countries might have tried to shift their imports away from the US members of the Seven Sisters and toward the British members in response to the post‐war dollar shortage.…”

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confidence: 99%

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Network effects, homogeneous goods and international currency choice: New evidence on oil markets from an older era

Eichengreen

Chițu

Mehl

2016

Canadian J of Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may Non-technical summaryOne of the clearest signs of the US dollar's dominant international role is its status as the all but exclusive currency used for pricing and settling transactions in global oil markets. The prices of West Texas Intermediate, Brent and Dubai crude are all expressed in dollars. The dollar is used as the unit of account for virtually all benchmark prices. NYMEX, the world's largest oil futures market, provides quotes exclusively in dollars. In the global oil market, whether for spot, term or future contracts and irrespective of country, the dollar reigns supreme.The dominance of the dollar in global oil markets is relevant for several key international economic issues. It is essential to the understanding of the dollar's international status and international currency choice. It has major implications for the degree of exchange rate pass-through of oil and commodity price shocks and for forecasting of domestic inflation. Many models used for policy simulations assume that oil prices are set in dollars.The dollar's dominance as unit of account and means of payment in global oil markets is said to rest on two pillars. One, as with all facets of international currency status, are network effects. In other words, oil prices tend to be expressed and transactions to be settled in dollars because the US remained the largest global oil producer for fully a century, until it was overtaken by the Middle East in the 1950s. Once the practice of expressing oil prices in dollars and settling transactions in that unit became so widespread, and a critical mass of transactions was reached, it was costly for individual buyers and sellers to do otherwise. The second pillar is homogeneity of the product. Because oil is a relatively homogenous commodity, there is substantial convenience in quoting prices in just one currency to facilitate comparisons.The literature on the use of the dollar as the currency of denomination, invoicing and settlement in oil-market transactions is pitched at a high level of generality, however. It tends to be based on stylised rather than closely-observed facts. A major constraint facing empirical work on currency choice in international trade in oil, as in other commodities, goods and services, has been lack of detailed data. Moreover, there has been no meaningful empirical work on choice of currency in the oil market because it is presumed that there is no variation in currency usage in...

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Section: Empirical Frameworkmentioning

confidence: 99%

Section: Overviewmentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

mentioning

confidence: 99%

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Network effects, homogeneous goods and international currency choice: New evidence on oil markets from an older era

Eichengreen

Chițu

Mehl

2016

Canadian J of Economics

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Petrocapitalism

Huber

2017

International Encyclopedia of Geography

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This entry attempts to explain different ways to think about the relationship between oil and capitalist economies – or, what has been called “petrocapitalism.” It first reviews the initial usage of the term in reference to specific forms of accumulation tied up in extraction, state power, violence, and environmental degradation. Second, it reviews more recent attempts to come to terms with the centrality of petroleum products to the reproduction of global capitalism more broadly. While a focus on extraction yields a focused discussion of the politics of oil, consumptive petrocapitalism presents a much more dispersed understanding of oil's role in shaping politics more broadly. The entry concludes with a brief discussion of the prospects of moving beyond petrocapitalism.

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