The Kingdom of Romania: battleground of a forgotten economic war (1859–1944)

In 1859, the principalities of Moldavia and Wallachia united, paving the way for the formation of the modern Romanian nation-state. Soon after, the Kingdom of Romania became the stage for an economic battle among Europe’s great powers, which saw in this long Ottoman-dominated region a rare opportunity to expand their influence. Two objectives were at stake: first, to seize vital resources and control key infrastructure; and second, to prevent European competitors from reshaping this strategically significant area to their own advantage.

Competing to harness Romanian trade flows

Britain was quick to gain an edge by developing infrastructure to facilitate resource extraction and trade. A major focus of British investment lay in building strategic rail lines and expanding ports to link inland production centers with foreign markets via the Danube and the Black Sea. One pivotal example was the Cernavodă–Constanța rail line, spearheaded by the Danube and Black Sea Railway and Kustendje Harbour Company Limited as early as the 1860s, which played a central role in carrying Romanian exports to international markets.

Beyond British companies, other international players were also involved in developing Romania’s rail and port infrastructure. French, German, and Dutch firms all contributed to expanding the country’s network. French and German companies were particularly active in building and upgrading railways and port facilities, while Dutch investors played a key role in enlarging dock and warehouse capacity. These infrastructure projects were often marked by technical challenges and frequent changes of contractors, highlighting the ever-shifting and sometimes precarious nature of foreign investment in Romania—shaped by evolving economic conditions and political rivalries.

Control of these logistics channels also fueled intense competition between Austria-Hungary and Italy. Benefiting from historic ties in Transylvania, Austria-Hungary focused on developing overland routes linking its territories to Romania via rail and the Danube. Italy, by contrast, leveraged its maritime strength to promote a Romanian–Mediterranean trade route, hoping to funnel goods through its ports en route to Central Europe. The resulting customs war between Romania and Austria-Hungary ultimately boosted Romanian trade with Western nations via sea routes. This race for transport lines was not merely about commerce; it was a key element in broader strategies by major powers seeking to assert influence in a crucial part of Europe.

The battle for Romania’s “Black Gold”

By the early 20th century, Romania was emerging as one of the world’s top oil producers, attracting investment from powers such as Britain, France, Germany, Italy, the Netherlands, and later the United States. Major firms like the Anglo-Persian Oil Company (which took control of Steaua Romana—originally founded with Hungarian capital—in 1922), the Compagnie Française des Pétroles (the future Total), Royal Dutch Shell, the Società Petrolifera Italo Rumena, and Standard Oil all played pivotal roles. British infrastructure investments mentioned earlier ensured that Romanian oil could be shipped to the Black Sea, illustrating Britain’s integrated and strategic economic vision in Romania.

In parallel, Romanian oil took on heightened importance in the first half of the 20th century amid Germany’s ambitions for European dominance. Petroleum, which had become a critical resource for modern warfare, lay at the heart of German plans to secure hegemony across the continent. Determined to control Central and Eastern Europe’s strategic resources, Germany regarded Romanian oil as vital for sustaining both its military and industrial efforts. After the First World War, France managed to recoup a sizeable share of petroleum assets previously under German control. However, despite the valuable experience gained, it struggled to manage these holdings amid logistical challenges, rising Romanian nationalism, and the impact of the 1929 economic crisis on oil prices.

Ultimately, Germany regained a central position in Romania’s oil sector, partly through escalating pressure beginning in 1933. German tactics included direct economic threats, exploiting Romania’s dependence on agricultural exports to Germany. In 1935, for instance, Germany purchased 36% of Romania’s agricultural exports and 61% of its raw materials. With the prospect of losing its largest buyer, Romania reluctantly ceded more and more control of its oil industry to Germany. This allowed the Reich to bolster its war effort and solidify its strategic position in Europe on the eve of the Second World War.

Bucharest as a nexus of influence

France had played an important part in Romania ever since Napoleon III’s support in the mid-19th century. This influence—strengthened by the pro-French outlook of many Romanian leaders—was further amplified by military figures like Ambroise Desprès and Henri Berthelot. They helped weaken the German Krupp trust’s monopoly on Romanian military equipment, allowing France to become a vital supplier between the two World Wars. Germany, however, contested this foothold aggressively. In 1934, it launched a campaign against “French gold” in Romania, aiming to undercut French influence, which sought to block Germany’s expansion in Eastern Europe. The post-1929 economic crisis exacerbated Romania’s difficulties, undermining France’s ability to sustain its economic backing and leaving its position increasingly vulnerable.

Germany’s presence in Romania dated back to events such as the 1868 “Strousberg Affair,” when German investors controversially won railway contracts, aided by King Carol I’s Prussian roots. Later, in 1881, a mere hint of pressure from Bismarck sufficed to make Romania yield in a business dispute. In the 1930s, Germany also expanded its cultural and political reach by sending 600 Romanian students—mostly on German government scholarships—to study in Germany. At the same time, it carried out propaganda campaigns among Transylvania’s German-speaking communities (Saxons and Swabians), which were politically and culturally active.

Meanwhile, Mussolini’s Italy also pursued influence in Romania, hoping to counteract French sway. This push echoed earlier efforts—such as the settlement of Italian families in Romania at the end of the 19th century to acquire farmland and develop agriculture. Under Mussolini, Rome sought to strengthen Italy’s political and economic clout in Central Europe, targeting key sectors like oil and timber, both of which were in short supply in Italy but vital to its strategic interests.

Warfare within the economic war

Economic warfare can escalate into open conflict. Powers may try to cripple their rivals by blocking access to crucial resources, undermining logistical networks, or resorting to outright territorial conquest to seize vital supplies and cut off the enemy. This dynamic was especially pronounced before the advent of nuclear weapons, after which the risks tied to direct conflict for economic gain pushed countries toward more indirect forms of competition—via influence, international law, and other non-military means.

Romania became a focal point for multiple powers. From the 19th century onward, the Russian Empire—and later the USSR—pursued strategies of both economic and territorial predation. After Romania’s War of Independence against the Ottoman Empire (1877–1878), Russia annexed southern Bessarabia, securing access to the Danube Delta and a major agricultural region. Bessarabia, famed for its fertile chernozem (“black earth”) soils, considered among the best in the world for farming, was soon linked to Odessa’s port by newly built rail lines. These developments streamlined exports of Moldavian grain and timber, knitting Bessarabia into Russia’s economy.

World War I and World War II saw Germany attempt to seize Romania to guarantee unfettered access to its abundant oil, raw materials, and agricultural products—essential for bolstering Germany’s resource autonomy and challenging the British Empire’s maritime dominance. The concept of Lebensraum, championed by German geographers like Friedrich Ratzel and Karl Haushofer and later embraced by Hitler’s regime, found tangible application here. One example was Berlin’s push in the 1930s, under Hjalmar Schacht’s “New Plan,” to expand soybean cultivation in Romania. Soybeans were crucial for Germany’s production of synthetic rubber, explosives, and other industrial goods—enabling it to cut reliance on Manchurian soybeans, which were pricier and heavily dependent on global sea routes.

Alarmed by Germany’s rising economic power, France fought to maintain its own influence in Romania. This struggle continued after World War I, propelled by figures such as Henri Berthelot, and into the interwar period. French Foreign Minister Louis Barthou attempted to build a security system by backing the Little Entente and proposing treaties like the Eastern Pact, aiming to check Germany’s dominance in Eastern Europe.