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Refining industry in agony time to think of an alternative

Marxist Analysis · 2026-05-13

Core Argument

The article argues that the wave of refinery closures in Europe and the US is not an inevitable market correction but a manifestation of capitalist anarchy, in which productive capacity built over decades is destroyed in one region while identical capacity is constructed elsewhere, at enormous cost. The central claim is that this contradiction — simultaneous closure and construction of the same type of plant — can only be resolved through democratic international planning under working-class control. The article insists that trade unions must move beyond defensive struggles against closures and instead advance a positive, internationally coordinated alternative for the industry.

Theoretical Grounding

The analysis draws on the Marxist theory of capitalist crisis as a crisis of overaccumulation, though it does not use the term explicitly. The core dynamic described — capacity rendered unprofitable in one region while new capacity is built in another — is a concrete expression of the anarchy of production under capitalism, where investment decisions are governed by the pursuit of profit rather than social need. The article implicitly relies on Marx's distinction between use-value and exchange-value: the refineries retain their social usefulness but have lost their capacity to generate profit for capital.

The argument also engages with Lenin's theory of imperialism, particularly the analysis of inter-imperialist rivalry. The biofuel mandates in the US and EU are interpreted not as environmental policy but as a strategic attempt by imperialist states to reduce dependence on oil-producing former colonies, reflecting the geopolitical dimension of capitalist competition.

The article sits firmly within the Trotskyist tradition's emphasis on the impossibility of rational planning under capitalism and the necessity of international working-class coordination. The call for trade unions to become "schools of socialism" echoes Lenin's What Is to Be Done?, while the demand for a global plan for the industry reflects the tradition's insistence that socialist planning must be international from the outset.

Conjunctural Relevance

The article was written in March 2010, at a specific conjuncture: the immediate aftermath of the 2008 global financial crisis, when demand for refined products had collapsed in the advanced capitalist economies. The data is precise: 10 million barrels per day of capacity expected to close (11% of global capacity), approximately 100 refineries at risk, utilisation rates already below the 80% threshold required for profitable operation. Nine refineries had already closed in the US, UK, France, Japan and Ivory Coast.

The article identifies several structural factors beyond the cyclical downturn: long-term demand decline in Europe, the US and Japan due to fuel substitution (natural gas replacing heating oil), improved vehicle efficiency, and the introduction of biofuel mandates. These are not temporary phenomena but secular trends that would persist even if growth returned to pre-crisis levels.

Geopolitically, the article notes the shift of refining capacity toward China, India and the Middle East, where new projects equivalent to the capacity being closed in the West were coming onstream. This reflects the broader reconfiguration of global production chains and the relative decline of the old imperialist centres.

Where the Argument Continues

The article is a snapshot of a specific moment in the oil industry's restructuring. The argument about the irrationality of capitalist energy production continues in several directions within the Marxist tradition:

  • The relationship between energy transitions and capitalist crisis is developed further in IDOM articles on peak oil, climate change, and the contradictions of "green capitalism". The critique of biofuels as pseudo-environmental policy is a thread that runs through subsequent analyses of carbon markets and emissions trading.

  • The broader argument about the need for international trade union coordination across industries is taken up in IDOM's coverage of the auto industry crisis and steel sector restructuring, where similar dynamics of overcapacity and plant closures are analysed.

  • The theoretical question of how to plan the transition away from fossil fuels under working-class control is addressed in Marxist debates on "ecosocialism" and the concept of "just transition", though these are not explicitly referenced in the article.

  • Against the Stream episodes from the period discuss the political strategy required to build the kind of international trade union coordination the article calls for, including the fight against reformist and nationalist tendencies within the labour movement.

Connections

  • Lenin, Imperialism, the Highest Stage of Capitalism — for the analysis of inter-imperialist rivalry and the geopolitical drivers of energy policy.
  • Marx, Capital Volume 3, Part 3 (The Law of the Tendency of the Rate of Profit to Fall) — for the theoretical basis of overaccumulation and the destruction of capital.
  • Trotsky, The Transitional Program — for the method of transitional demands that connect immediate defensive struggles to the strategic goal of socialist planning.
  • Ernest Mandel, Late Capitalism — for the analysis of the international restructuring of production and the uneven development of the world economy.
  • IDOM articles on the auto industry crisis (2008-2010) and the steel industry restructuring — for parallel analyses of overcapacity and plant closures in other sectors.

Key Quotes

  1. "Billion dollar refineries are closed in one part of the world, while others open elsewhere. This is the craziness of the global capitalist economy. It wastes huge amounts of material and human resources, whereas these same resources could be used in a global plan to develop the economy in way more in line with the interests of all the people of the world."

  2. "While from a short-sighted profit point of view up to 100 refineries will have to close in the coming decade, mainly in Europe and the US, it makes absolute sense to keep them open from a social point of view."

  3. "This crazy policy has nothing to do with environmental concerns. Sensing that their grip over the ex-colonial, oil producing world is slipping, imperialist countries have been trying to create an oil industry at home."

  4. "What makes these projects even more hazardous under capitalism is that these super-projects are based on the expectation of high demand growth rates in these countries. If a severe recession wipes out demand in these countries, global demand and supply may not balance out and an even more brutal struggle over markets could ensue."

  5. "Trade unions in all countries could organise regional and international congresses to discuss the future of the industry and present a worked out plan to the public. In this way, they could be seen as a beacon of hope by the whole of society, rather than mere 'defenders of an economic past that has outlived itself' as the bourgeoisie will portrait it."

  6. "Trade unions would truly become the 'schools of socialism' as all the workers involved immediately understand that today's problems can only be solved on an international basis by working together globally."