A Challenge to Cold War Energy Politics? The US and Italy’s Relations with the Soviet Union, 1958-1969

This chapter examines the relations Italy and ENI established with the USSR between 1958 and 1969, and US interpretations and reactions to them. Based on corporate and government archives in the US and Italy, it argues that with its agreements, Italy---through ENI---challenged US energy policies and oil interests in Italy and Western Europe. Given the country’s lack of autonomous forms of energy resources and its strong dependence on international oil companies, it used the deals with the USSR to access cheap sources of energy and export its petrochemical and steel products at a time when the country was experiencing great industrial growth. While the first agreement was signed in 1958, the most important treaty between ENI and the USSR was ratified in 1960, when they agreed to exchange crude oil for synthetic rubber and material the Soviets could use to build a pipeline linking their oil fields with Western Europe. The US administration and international oil companies reacted immediately by putting the Italian government under pressure, challenging ENI’s activities in oil-producing countries and, eventually, placing an embargo on the sale of pipeline material to the USSR by NATO members. One of the arguments of this chapter is that ENI and Italy transformed the tensions that accompanied the signing of the Italian-Soviet agreements into a tool to force American and British oil companies and the US government to meet Italy’s energy needs by providing cheap oil and to recognize ENI as a legitimate international actor. Therefore, while the deals undoubtedly challenged Cold War oil policies, particularly US oil interests, they also strengthened Italy’s position and membership inside the Atlantic Alliance. By the mid-1960s, the process of détente replaced many of the tensions that accompanied the signing of the Italian-Soviet oil deals with various forms of growing economic cooperation between the blocs. Italy, along with other West European countries, increased its exchanges with the USSR in a context characterized by the growing power of the Organization of Petroleum Exporting Countries (OPEC) and of oil producers in general. Especially in the aftermath of the Six-Day War of 1967, the Italian government encouraged ENI to diversify the country’s sources of energy by importing natural gas from the USSR as well as from the Netherlands. The contracts the oil company signed in 1967 and 1969 transformed the geography of Italy’s energy relations, and strengthened the country’s international role, while at the same time paving the way for the establishment of stronger forms of European integration and dependence on Soviet gas. While Italy emerged as a more autonomous actor in the energy field, the US administration recognized the importance Soviet energy resources had for the European market, and endorsed growing forms of exchange between the two blocs as a sign of détente. By the early 1970s, therefore, the US was mainly concerned not about Soviet-West European energy relations, but rather about oil producers’ growing political and economic power on the international oil market, a concern that only increased with the impact of the 1973 “oil shock.