Holy Roman Empire

The events transpiring in Egypt were naturally unknown to Franz, such minor matters did not necessitate the personal intervention of the Emperor.

Recently, aside from a lackluster outlook on agriculture, the economy of Austria had generally been flourishing.

If nothing unexpected occurred, by the end of the year, it was expected to rebound to the peak levels before the onset of the economic crisis.

Reviewing the latest economic report, Franz breathed a sigh of relief. The Near East development plan was essentially financed by hefty investments, with no returns visible in the short term.

To raise funds, the Vienna Government had issued construction bonds worth 5 Billion Divine Shields incrementally, with monthly interest payments amounting to 1.86 million.

This was just the beginning, as government debt would continue to rise with the ongoing advancement of the Near East development plan.

Add to that the pre-existing debt, and Franz was surprised to discover that surpassing the Russians in total government debt was becoming imminent.

"What’s the progress on the oil field development in the Iraq region?"

There was no choice, as the only project in the Near East that would see returns in the short term was the oil field discovered in Iraq.

With so many oil fields in the Middle East region, Franz was unclear which future oil field specifically it was.

These were minor issues; the first discovered would be the first exploited and the later discovered the later exploited, as the oil buried underground was not going anywhere.

Prime Minister Carl answered, "The extraction equipment has been installed, and currently, the construction of the oil pipeline is underway, with completion expected by the end of the year.

Once operational, within a year, the oil from the Iraq region would suffice to meet the domestic demand.

To cut costs, the Austrian Oil Company was considering shutting down some of the smaller domestic oil fields to reduce crude oil extraction costs."

Unquestionably, judging from the construction period, the oil pipeline was not being laid directly to Austria but to the Mesopotamian region. From there, it would be transported by small vessels into the Persian Gulf, then transferred to oil tankers for shipment back to Austria. Continue reading at empire

Although the Vienna Government allowed personal oil extraction, a vast government-discovered oil field like the ones in Iraq was still the preserve of state-owned enterprises.

Since the second industrial revolution began, Austria’s demand for oil had been increasing by leaps and bounds. Even during the economic crisis, it maintained a double-digit growth rate.

By 1884, Austria’s oil consumption had incredibly reached 15,864,500 barrels per year.

This figure was negligible in future contexts, roughly the daily consumption of some major nations, but in this era, it was absolutely record-breaking.

Due to Austria’s surging demand for oil, the international oil price had climbed to historical peaks, with each barrel priced at 5.6 Divine Shields.

The price of the equivalent weight of crude oil had even surpassed that of grains. Its high value turned the previously inconspicuous oil into "Black Gold."

If it were merely this, oil would still be a niche commodity. After all, Austria’s oil consumption surpassed the combined consumption of other nations.

The entire crude oil market was just over 100 million Divine Shields, and the total international oil trade value was merely a pitiful 20 to 30 million Divine Shields, with Russians accounting for half of it.

The real interest came from the speed at which oil demand increased.

From 1884 to 1885, Austria’s oil demand had grown by 23.3%, consequently increasing the global oil demand by 15.4%. The terrifying pace of this increase was indeed self-explanatory.

The growth of the market was due to multiple factors, with the advent of the diesel generator at the forefront. Though the cost of generating electricity was higher than coal, these generators were compact, portable, and easy to operate.

Humanity had just entered the electric era; even in Austria, where the electric industry was most advanced, frequent power outages were unavoidable.

The common people could bear with it, as the recently phased-out gas lamps were still usable. Even if they were gone, candles could be lit.

But factories could not afford to stop production every time there was a power outage.

In this context, diesel generators with independent power generation capacity had become essential for many factories.

Not just factories, but also the nobility and capitalists kept them on hand, and Franz was no exception, as even the Vienna Palace couldn’t guarantee an uninterrupted power supply.

These seemingly inconspicuous machines had actually become major oil consumers, and their growth rate was extremely swift.

Soon after came the tractor; since the world’s first internal combustion engine powered tractor was launched in Vienna in 1880, it had been unstoppable.

In just five short years, this new model of tractor had been upgraded twice, with significant improvements in performance.

Due to its lightweight and ease of operation, it quickly defeated its competitor, the steam tractor, and began to spread in agricultural and industrial production.

As of now, there are already over 150,000 tractors in Austria, 67 percent of which use internal combustion engines.

This was just the beginning; as the Near East development plan progressed, the demand for tractors continued to increase day by day.

If it weren’t for production capacity limitations, the number of tractors in Austria would have already exceeded the 200,000 mark.

Manufacturers were expanding their production capacity and, in a maximum of one to two years, the numbers within Austria would surpass this figure.

Various types of engineering equipment, all major oil consumers, need not be mentioned.

By comparison, passenger cars are just child’s play. After all, they are still the patent of a small number of the wealthy and have not yet become widespread across the country.

From the current situation, Franz’s initial prediction that oil consumption would double in five years had actually been too conservative.

After all, the oil industry was just getting started. Before the Second Industrial Revolution, the main use of oil was for lighting lamps.

The market was originally limited and had to compete with gas lighting and candles, so naturally, the demand couldn’t rise much. A small base meant a naturally fast growth rate.

This influence triggered a brief surge in the search for oil around the world.

But all this would soon come to an end. Once oil development in Iraq was underway, the international crude oil supply situation would fundamentally improve.

As for other regions, Franz wasn’t planning to start just yet. Once the outside world discovered the abundance of oil in the Middle East, it would not only draw enmity but also lead to a decline in oil prices.

Since launching the Near East development plan, Franz had made up his mind to use the oil extraction dividends to offset the government’s financial investments. Nôv(el)B\\jnn

"The government must prioritize this task. From the current situation, the domestic oil consumption is expected to double within the next four years.

The oil fields in the Iraq region will soon become an important source of income for the government. Relying on this oil field to support the interest payments involved in the Near East development plan will not be a problem."

No issues, just the capital interest. Supporting the capital input isn’t something that can be done in a short time.

No matter how high the profits from oil extraction are, the market size is there, directly capping the profit ceiling.

Though the growth rate may appear rapid, this pace cannot be sustained; as the base total grows, the growth rate will also gradually decrease.

Within four years, Austria’s demand for oil could double, but it would be difficult to double again on that basis in the following eight years.

Moreover, this kind of fiscal reliance on resources was not what Franz wanted.

From the beginning, he had decided to limit oil production capacity; meeting domestic demand and exporting just a small amount was enough.

Well, this was also a method to beat competitors. Inflating the international oil prices to delay the development pace of the oil industry in England and France by relying on high costs.