By Nicholas Ostrum
This is part of a special issue sponsored by the World Society Foundation: A Role for Europe in the Global Arena.
Lately, scholars, journalists, politicians, and everyday civilians have again begun to question the resilience of the global energy order and Germany’s energy strategy. In 2022 as Russia prepared to invade Ukraine, Germany relied on Russia for 34 percent of its oil, 55 percent of its gas consumption, and 57 percent of its total coal imports. Rightfully, many analysists had called Berlin out for this overdependency for years, but no governing coalition took meaningful action to derisk before the Russo-Ukrainian War made abrupt decoupling a necessity. This, however, was not the first time that Germany found itself overwhelmingly reliant on a single country for its primary energy imports and, through that dependency, unduly exposed to systemic political and economic risk.
By the end of the 1960s, the Federal Republic of Germany relied on Libya for upwards of 45 percent of its crude oil imports, which accounted for the vast majority of its crude oil throughput. Although such a heavy dependence had been a boon to German industry during the nearly 18-year reign of King Idris, it became a major but necessary vulnerability after Muammar Gaddafi seized power in 1969. This petro-economic interconnectivity, however, was not just a mono-dimensional dependency but a bilateral petro-economic inter-dependency that bound Libya to Germany as much as Germany to Libya and offered Bonn considerable and hitherto underestimated leverage in its dealings with Tripoli. This was not a story of triumph or dominance, but of how a middle power such as the FRG navigated an especially fraught period in international energy relations and achieved key priorities through tactical compromise and leveraging market power. It also suggests that strategic energy interdependencies can offer pathways forward for middle powers, individual European countries and Europe united, through the current moment of petro-political chaos.
The risks of dependence on foreign hydrocarbons are as apparent today as they ever have been. A country or region may be exposed through an overdependence on oil and natural gas produced by a handful of countries—i.e., Russia—or shipped through a small number of key chokepoints. The Ever Given tanker debacle in the Suez Canal in 2021 and the harassment of ships passing through the Strait of Hormuz and the Gulf of Aden by Iran and Houthi rebels today illustrate this dynamic. One need look no further than the United States, key belligerent in the current war against Iran, to see how even the largest producer-consumer states are not immune to the consequences of dependency on foreign oil. As of writing, the American benchmark West Texas Intermediate has climbed to over $92/barrel, while the Brent index hit $105. While crude prices tell one troublesome story, refined products tell another. Even as the Strait of Hormuz has somewhat reopened, the damage Iran has inflicted on regional refineries has brought many countries off-stream and crippled the production of others. Average gasoline prices in the US are well over $4/gallon and in the EU are over €2/liter. Diesel prices are even higher, having reached $6/gallon in the US, just slightly down from their historic peak of $6.51 set in September. In Germany, gasoline prices peaked in September at €2.215/liter and as of October 8 have only sunk by a few cents. Similar price movements have plagued consumers, industry, and national economies throughout the rest of Europe.
The recent price spikes are primarily due to a single producer coming off stream, a single chokepoint being blocked, and a single region becoming embroiled in war. This also means that nearly twenty refineries in the Middle East have also decreased or shut down production and exports because of the spiraling conflict. Although the resulting price spike is large on its own, it is important to recognize that it also builds off an elevated baseline established by the Russian invasion of Ukraine. Take Germany: Over the last decades, Berlin grew complacent in its relations with Russia. Already in the 1970s, around the time of the First Oil Crisis, West Germany found a petroleum lifeline in a Soviet Union that was eager to open hydrocarbon exports to western markets when global prices were especially high. After the first connections were made with the Transgas natural gas pipeline connecting Russian gas to Bavarian outlets in 1973, the hydrocarbon trade ballooned between the two states. This process gained more moment after German reunification brought the tail end of the Druzhba pipeline into the now expanded Federal Republic of Germany (FRG). By 2022, Germany relied on Russia for 34 percent of its oil and 55 percent of its gas consumption, not to mention nearly 57 percent of its total coal imports. Neutral observers from the outside could see the risks of this overdependency long before the Russo-Ukrainian War brought an abrupt end to it. This abrupt end, of course, introduced additional challenges in painful though temporary price spikes of 40-60 percent for crude oil and natural gas, which have compounded already burgeoning economic, social, and political tensions and metastasized in the rise of the pro-Putin populist radical right and left.[1]
So, where does this leave Europe, and Germany in particular? Is Europe being compelled to take on the risks of global oil and gas and suffer under events and policies beyond its and the European Union’s (EU) control? Is this dependency not simply evidence of Europe’s alleged geriatric decline to irrelevance? Or, shall we take Canada’s Mark Carney’s call for middle power solidarity seriously?[2] Shall we, as Guillaume Klossa, Catherine Trautmann, and Slavoj Žižek’s have recently proposed, consider this moment a potential turning point in Europe’s potential to uphold its enlightened emancipatory dreams? Does it leave space for Germany or Europe as a whole to confront the most urgent challenges of today—the fracturing of the global liberal order, the return of haphazardly transactional power politics and protectionism, unfettered AI, climate change, and the energy question while avoiding the pull of militarily and economically dominant blocs led by Washington, Beijing, and, the lesser among them, Moscow?[3] To what extent is extrication from global energy, economic, and trade networks possible, and desirable?
Here, I would like to propose an example from Germany’s past that suggests a way through these geopolitical storms. As all historical parallels are, this suggestion is imperfect. Moreover, this illustration does not tell a story of victory or dominance, as much as it tells about accepting the limits inherent in a country’s historically determined situation, at least for the time being, not only to help weather a crisis but also to affect moderate change in pursuit of national goals. This example shows that a middle power has options, especially in a world that, despite proxy wars and major power saber rattling, is still largely defined by complex interdependencies.
Complex interdependencies are relationships wherein two or more states engage with each other around multiple issues—trade, finance, economics, political agendas—through multiple governmental and non-governmental channels. Notably, these relationships are by definition flexible and durable, which allows all participants mechanisms of leverage even as they restrict their freedom of action.[4] Additionally, these relationships are asymmetrical, but also dynamic, which means any imbalance can be rebalanced, albeit with pressure and concessions. As I show below, this concept is especially pertinent when applied to West Germany’s relationship with the Libyan Arab Republic (LAR) during the long oil crisis of the early 1970s. And that relationship can help us better understand possibilities for maneuverability, strategic compromise, and active and passive leveraging for Germany and Europe today.
German-Libyan Energy Relations in the Early 1970s
In September 1969, West Germany was utterly dependent on Libya for its crude oil. Having minimal domestic production, the FRG imported over 90 percent of its crude throughput, upwards of 45 percent of which came from Libya and the vast majority from American and British companies.[5] Throughout the 1960s, this system worked to the economic benefit of the Kingdom of Libya, which over just a decade transformed from one of the world’s poorest countries to a wealthy petro-state, and of the FRG, which acquired the cheap oil necessary to continue its postwar economic expansion. When Muammar Gaddafi and his band of young officers seized control of Tripoli in September 1969, this relationship strained.
Strain, however, is not rupture, and the German-Libyan petro-economic interdependency proved remarkably resilient in ostensibly adverse circumstances. Between 1969 and 1973, the tax basis per barrel posted price, which helped determine realized market prices as well as long-term supply rates, had risen in Libya from $2.21 to roughly $3.45. Other changes to tax rates, a chaotic forced-indigenization campaign of all businesses, a Libyan cultural revolution, and pro-rationing policies likewise took Libyan oil off the market and drove prices up. But Bonn adapted both to the higher prices and diminished flows from Libya primarily by diversifying suppliers, which could be considered a forced derisking strategy. Then, in October 1973, Egypt and Syria coordinated an invasion of Israel, which in turn drove oil prices even higher. The Organization of Petroleum Exporting Countries (OPEC) played a role, though it focused on maintaining tax revenue parity amidst pressures of a devaluing dollar (the currency of oil contracts), swelling realized prices in Europe, and establishing a clunky taxation system that relied on a pre-determined tax basis rather than actual market prices. The Organization of Arab Petroleum Exporting Countries (OAPEC) also contributed to the price pressures. Libya was a member of both OPEC and AOPEC.
Just days after the Yom Kippur War began, OPEC announced a 17-percent posted price increase, which Tripoli soon leapfrogged with its own 94-percent increase. One day after the OPEC decision, OAPEC convened and announced a program of production cuts and targeted national boycotts with the express purpose of squeezing countries supportive of Israel. Although Germany was not listed among the boycotted markets, Gaddafi threatened to place it on the list on account of Bonn’s Israel-leaning neutralism.[6] Rather than retaliating, Bonn responded in ways that are often overlooked. Immediately, it identified that Tripoli was planning to use the war to stack economic and political demands.[7] The embassy itself was of two minds, both noting assurances from experts that the Libyan economy would not allow an embargo of Germany and questioning whether Gaddafi was “bow(ing) to (the) empirical fact” of this market logic.[8] The embassy also feared that Tripoli, rather than Bonn, would be the first to successfully leverage the interdependency in its favor.[9] Still, German diplomats and companies acted on the basis that Libya’s continued heavy dependency of German purchasers bound Gaddafi considerably and that diplomacy could largely take the place of offering undue concessions or aggravating hostilities through punitive measures. The embassy emphasized German support of Palestinian refugees and opportunities for Arab-European cooperation.[10] Additionally, Chancellor Willy Brandt embarked on a regional diplomatic campaign to convince other Arab producers to talk Gaddafi down.[11] At the same time, Bonn exercised leverage through its market power, as a major oil consuming state and a major regional trade power with which influential Arab governments in Riad, Cairo, and even Tripoli were willing, if not eager, to negotiate.[12] Interdependencies abounded, to different extents, but also for the greater stability of the intricately entwined global systems of petroleum trade and politics. And Bonn seized on these.
At the same time, Bonn continued a proactive domestic policy aimed at energy security. It had already taken prophylactic steps to shore up its petroleum resources in increasing stockpile mandates for importers and refiners, creating a version of a strategic reserve. The Economics Ministry had also drafted Germany’s first comprehensive energy policy outlining various diversification initiatives, which was released just days before the crisis proper began. Reactively, after the onset of OAPEC’s production cuts, Bonn followed other Western European capitals in passing an Emergency Decree through which the federal government claimed authority to institute new speed limits, car-free Sundays, and rationing measures as deemed necessary (notably, the FRG refrained from imposing price control measures, and for this reason it avoided the market distortions that plagued other European states).[13] At the same time, the Economics Ministry quickly developed an update to the new national energy program, which doubled down on diversification especially in domestically available sources of energy such as coal and nuclear power and on international cooperation. The update also included a further derisking of dependencies on unreliable producers.[14]
Some of the FRG’s ability to navigate the crisis was circumstantial. It was a coincidence that the winter of 1974 was mild, depressing the demand for valuable heating oil. It was a coincidence that the Biafran War had just ended a few years earlier, and Nigerian oil was now flowing reliably to West Germany. It was a coincidence that Brandt’s Neue Ostpolitik had taken hold and the Soviet Union was prepared to start exporting oil and natural gas to the FRG. The timing also roughly overlapped with major oil discoveries in the Dutch and Norwegian North Sea, which would help the German energy economy pivot northward as this oil came onstream at the end of the decade. All of this, in addition to increasing imports from Iran and Iraq’s refusal to take part in the OAPEC actions, ensured that the FRG could absorb the accrued decreases in Libyan exports and any in the future.
This story, however, is not one of triumph. The FRG remained uncomfortably vulnerable. Its economy took an enormous hit from the four-fold increase in oil prices associated with the crisis. Moreover, Bonn was pressured to make certain political concessions. Quite famously, the crisis pushed Bonn to moderate its position on the Arab-Israeli conflict and terminate the shipment of Israel-bound armaments through German bases. It should be recognized, however, that these moves were not merely imposed by OAPEC or Libya but were also encouraged by other Western European governments, finding expression in the European Community’s (EC) Declaration on the Middle East Crisis. Brandt received heavy criticism from Washington and Tel Aviv about ambiguity in the document’s understanding of UN Resolution 242, which in separate translations claimed Israel needed to withdraw from territories occupied (implying “some”) and the territories occupied (implying “all”) after the Six-Day War. Taken with the Declaration of European Identity from December 1973, moreover, this minor step from unquestionably supporting Israel toward accepting some Arab claims to territory was a much larger step toward Europe and the more openly acknowledged interdependencies that the EC entailed.[15] It is true this identity only went so far, and oil sharing agreements during the crisis led to tensions, especially with the embargoed Netherlands.[16] Still, even this story of German-Libyan relations has multilateral considerations that complicate any clean narrative. One should also emphasize that any step from Israel and toward Arab positions was partial. In the end, not just despite its continued reliance on Libyan oil but because of Libya’s reliance on West Germany, Bonn rejected Libyan attempts to leverage preferential exports for weapons deliveries and restitution or the severance of economic and political ties with Israel.[17]
OAPEC’s and Libya’s clout had clear limits, even in a system of asymmetrical interdependencies that temporarily lent them considerable influence. The FRG maintained sufficient Libyan production throughout the direst period of the crisis, precisely because Tripoli refused to sacrifice its second largest market for questionably attainable political concessions on German policy towards Israel. None of this could be considered an outright victory for West Germany, which was not in the position to expect or effect one. Rather, the point here is that Bonn navigated the crisis in the Middle East and with Libya through exercising passive and active market power. The interdependency with Libya, moreover, evolved but also persisted. After the crisis, Libyans actually turned harder to imports of luxury and mechanical goods from West Germany, recycling some of the petro-dollars garnered during the crisis because of the price shock and afterwards and directed these funds back to German companies. Libyan elites, it seemed, were becoming ever more comfortable with the largely German-produced amenities of petroleum-driven and -funded modernity.[18] And in turn, Gaddafi needed to sell more oil to gain the funds to purchase more western and German technologies.
Implications for Energy Interdependencies Today
Despite the pull of its export economy, the FRG was hardly a great power in 1973/4. Rather, it was a middle power, though one with significant vulnerabilities and influence because of the interdependency that had developed around its consumption of Arab and especially Libyan petroleum. In a similar way, Germany’s continued dependency on foreign petroleum and natural gas today involves vulnerability and compromise. However, energy-economic interdependencies such as these are not a zero-sum game. Rather, the reflexivity of risk and advantage, compounded effects, messy linkages and knots, and stubborn tenacity are all part of their structure. The story above is not of victory or dominance. Rather, it is an example of how countries, in this case the FRG, navigated a world of bilateral and multilateral complexity and interconnectivity while promoting and achieving key priorities.
There are critical differences between German-Libyan relations in the 1970s and German-Russian relations today, even as some causal relationship exists as the oil crisis nudged Germany toward its initial embrace of red gas and oil.[19] For one, as leader of a country with a large modern military and immense stores of nuclear weapons, Vladimir Putin has more capacity to commit much greater violence in Europe than Gaddafi ever had, despite proven Libyan links to various terrorist acts in Germany and elsewhere.[20] In our current moment, many interdependencies must be accepted as having a higher degree of military and other related threats—including cyber warfare and sabotage—than when Joseph Nye and Robert Keohane first envisioned them in the détente of the late 1970s. This, however, does not render the petro-economic interdependencies irrelevant or even secondary. German-Libyan relations persisted through the first years of Gaddafi’s rule and the Oil Crisis because the FRG continued to need Libyan oil, albeit in decreasing quantities, and Libya needed West German technologies, machine and auto exports, and oil markets. One could say the same for Russia’s relationship with German markets and investments on the verge of Putin’s invasion of Ukraine. Although Germany, the EU, and NATO failed to persuade Russia not to invade, their retaliatory actions, for example Germany abruptly terminating its Russian hydrocarbon imports and axing the Nord Stream II pipeline just days before it was to come on stream, caught Moscow by surprise. These actions continue to drag on the Russian economy and push it further towards becoming a junior partner to China,[21] despite the contested diesel supply agreement between Washington and Moscow, which, if enacted, will break the boycott on Russian hydrocarbons but as it stands be too small to make a sizable impact on diesel prices in the US or increase Russian production and profits. Neither Moscow’s relegation to secondary status vis-à-vis Beijing, nor the continued economic damage of the boycott to Russia, nor Ukraine’s remarkable resistance were in Putin’s plans. When it comes to oil and gas, Germany had recourse and deployed it to great effect.
Overdependency is a serious concern, whether in the form of oil imports from Libya or oil and gas from Russia. Add to the list the lopsided interdependencies currently forming with the US, which, as a corollary to an aggressive Energy Dominance strategy, is now supplying Germany with 90 percent of its liquefied natural gas (LNG) or with China, which until recently was the source of most of Germany’s 5G technology. These dependencies can and should be avoided through diversification. However, especially in the messy globalized system of energy politics, interdependencies even with untrusted or antagonistic parties cannot be wholly avoided but should be mitigated and restricted to an acceptable level of exposure. Even in uneven interdependencies, as they tend to be, the consuming party also derives considerable mark power, and that power can magnify if it diversifies and derisks its energy dependencies and leverages its market power within those interdependencies strategically. This leverage may give little comfort in the current environment. But it may offer the beginnings of a way forward—ideally in cooperation with an increasingly integrated, independent, and assertive European bloc.
Nicholas Ostrum is Assistant Professor of History at Kent State University and holds a PhD from Stony Brook. He has published research and reviews in various fora, including the International History Review, Central European History, Energy Humanities, EuropeNow, Journal of World History, and edited volumes on global Germany. His current project analyzes West Germany’s petroleum, development, and political relations with Syria and Libya from the 1950s through the 1973/4 Oil Crisis.
Notes
[1] For the far right, see the recent installment of the AfD’s Tobias Rausch as the minister president of Saxony-Anhalt. Tim Frehler, “Die AfD feiert, die CDU taumelt,” Süddeutsche Zeitung, October 7, 2026: https://www.sueddeutsche.de/politik/sachsen-anhalt-afd-cdu-landtagspraesident-krise-fraktion-li.3559754. For the far left, see die Linke’s recent electoral success in Berlin and the impending Linke-Grüne-SPD governing coalition. Meredith Haaf, „Rot-Grün-Rot macht Weg für Sondierungen frei,“ Süddeutsche Zeitung, October 7, 2026: https://www.sueddeutsche.de/politik/linke-spd-gruene-berlin-sondierungsgespraeche-antisemitismus-li.3560309.
[2] Ian Austen, “At U.N., Carney Lays Out a Broad Plan for a Divided World,” The New York Times, September 22, 2026: https://www.nytimes.com/2026/09/22/world/canada/carney-united-nations-general-assembly.html.
[3] Slavoj Žižek, “Europe Must Choose: Europe is Waking Up from the American Dream,” Žižek Goads and Prods, September 23, 2006, https://slavoj.substack.com/p/europe-must-choose.
[4] Robert O. Keohane and Joseph S. Nye, Power and Interdependence (Boston: Little, Brown, 1977), 24-5.
[5] More specifically, West Germany imported 89,551,440 tons of crude oil in 1969, 40,482,751 of which came from Libya. Statstics derived from Jahrbuch für die Bundesrepublik Deutschland 1971 (Stuttgart and Mainz: W. Kohlhammer Verlag, 1971).
[6] Hoffmann-Rothe, November 5, 1973, Libyen-Wochenbericht Nr. 44/73: BBA B55/5699; Fernschreiben, Lankes, Nr. 470, October 23, 1973, Betr.: Nahostkrise; hier: Angebliche PLO-Forderung eines Erdoelboykotts gegen die Bundesrepublik: Politisches Archiv des Auswärigen Amts (PAAA) ZA 104991.
[7] Werner, Nr. 438, October 21 1973, Betr.: Libysche Erdölpolitik; hier: 1. Posted-Price Erhoehung; 2. Eksportstop nach den USA; 3. Produktionsdrosselung um 5 Prozent: PAAA ZA 104991.
[8] Mueller-Chorus, Nr. 465, November 1, 1973, Betr.: Deutsche Haltung im Nahostkonflikt; hier: libysche Androhung eines Oelembargos: BAK B102/123680.
[9] According to Ambassador Günther Franz Werner, Libyan leveraging was some sort of “bazar tactic,“ while presumably German leveraging would mark the acceptable norm. Werner, Nr. 442, Betr.: Nahost-Konflikt-Libyens Haltung nach der OPEC-Konferenz vom 17.10 in Kuwait, October 20, 1973, PAAA ZA 104991.
[10] Mueller-Chorus, Nr. 459, October 30, 1973, Betr.: Deutsche Haltung in Nahost-Konflikt: BAK B102/123680.
[11] Rüdiger Graf, Oil and Sovereignty: Petro-Knowledge and Energy Policy in the United States and Western Europe in the 1970s (New York: Berghahn Books, 2018), 243-4.
[12] See: William Glenn Gray, Trading Power: West Germany’s Rise to Global Influence, 1963-1975 (Cambridge: Cambridge University Press, 2023); Jan-Otmar Hesse, Exportweltmeister: Geschichte einer deutschen Obsession (Frankfurt am Main: Suhrkamp, 2023).
[13] Romano Prodi and Alberto Clô, “Europe,” The Oil Crisis, Raymond Vernon, ed. (New York: W.W. Norton & Company, 1976), 99.
[14] Deutscher Bundestag, 7. Wahlperiode, Drucksache 7/2713, October 10, 1974, Unterrichtung durch die Bundesregierung: Erste Fortschreibung des Energieprogramms der Bundesregierung: https://dserver.bundestag.de/btd/07/027/0702713.pdf.
[15] Aufzeichnung, July 22, 1971, Betr.: Besuch des Stellvertretenden libyschen Ministerpräsidenten Abdulsalam Jalloud in Bonn vom 18. bis 20. Juli 1971: PAAA B36 412.
[16] Sandra Tauer, Störfall für die gute Nachbarschaft?: Deutsche und Franzosen auf der Suche nach einer gemeinsamen Energiepolitik (Göttingen: Vandenhoeck und Ruprecht, 2012), 108.
[17] “Europa muß den Arabern Waffen liefern,“ Der Spiegel 46/1973 (11 November 1973): https://www.spiegel.de/politik/europa-muss-den-arabern-waffen-liefern-a-27fb7bec-0002-0001-0000-000041871321. See also, Szatkowski, Gaddafis Libyen¸ 50-1.
[18] Werner, March 9 1974, Betr.: Impressionen und Reflektionen anlässlich einer Informationsreise in einem ölproduzierenden reichen Entwicklungsland – Libyen im 5. Jahr der Revolution: PAAA ZA 104834.
[19] For this broader story, see: Per Högselius, Red Gas: Russia and the Origins of European Energy Dependence (New York: Palgrave Macmillan, 2013).
[20] These include the Munich Massacre and Lufthansa Flight 615 hijacking in 1972 and the La Belle Discotheque bombing in West Berlin in 1986.
[21]Spencer Kimball, “Trump’s diesel deal with Russia equals less than two weeks of U.S. demand,” CNBC, October 13, 2026: https://www.cnbc.com/2026/10/13/trump-putin-zelenskyy-russia-ukraine-diesel-oil-price.html.
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