Joel Hayward, “Hitler's Quest for Oil: the Impact of Economic Considerations on Military Strategy, 1941-42” http://joelhayward.org/Hitlers-Quest-Finished.pdf:
Early in 1942, Hitler argued persuasively that the seizure of these extremely rich oilfields would relieve Germany's critical shortages and enable it, if necessary, to continue fighting in a drawn-out war of attrition. The seizure of these geographically distant oilfields, although still within reach of British bombers based in Iraq (which were not, in any event, a danger in 1942), would also greatly offset the constant danger of Allied air attacks against the Ploesti plants in Rumania and its own synthetic fuel plants within the Reich itself. More importantly, Hitler declared, the severance of the various north-south railways between the oil and industrial regions and Moscow, the capture of the oilfields themselves and the blocking of the vital Volga river system (which carried not only oil but armaments and lend-lease supplies from Archangel) would be a massive, and probably mortal blow to the Soviet economy and war effort.
The surviving documentation reveals that few OKW and OKH officers openly expressed doubts about the proposed campaign to seize the Caucasus oilfield, and that none actually challenged Hitler on the feasibility of the plan. It may be, of course, that after the dismissal of von Brauchitsch and von Rundstedt, none were brave enough to risk the Führers wrath. It appears more likely, however, that Hitler's military advisers were in general agreement that, within the limited range of options available, his plan contained the most merit. Even Haider, who personally thought (but never made a strong case to the High Command) that the eastern armies should maintain an essentially defensive posture for the time being, was apparently won over to the general plan. In response to the Navy's 'Suez Memorandum' of 3 April, which advocated the urgent capture of the Suez Canal by Rommel's forces, Haider emphatically stated to the OKH Naval Liaison Officer, Kapitän zur See Konrad Weygold, that the conquest of the Caucasus was 'absolutely vital' for Germany's continued war effort. If the oilfield were not captured, 'the Reich will not survive long'. The Caucasus, he explained 'has more or less the same importance as Silesia once had for Prussia.' Having doubtless carefully studied the detailed briefings of the War Economy and Armaments Office, he knew that Germany's oil situation was critical. On 16 February, by way of illustration, this office had grimly warned, in its conclusion to a 16-page report on Germany's fuel situation that:
One thing is now clear: without Russian oil we simply cannot utilize fully the regions of Russia we now occupy. But above all, without Russian oil the German war machine must from now on become increasingly more impotent.
Indeed, as the year progressed it became increasingly evident to senior German planners that Hitler's emphasis on the capture of oil resources was well-founded. For example, on 6 June (three weeks before the start of the campaign), the OKW glumly reported that oil supplies throughout the rest of 1942 would be 'one of the weakest points in our defensive capabilities'. The significance of this comment is obvious; defensive actions require far less oil than offensive ones, so the situation must certainly have looked black. Because oil shortages were so critical, the report continued, 'the operational freedom of all three services will be restricted, and the armaments industry will also suffer. Reserves have been reduced almost to nothing, so we are now forced to rely on production'.
It appears that during this period there was little discussion between Hitler and his military advisers over the important question of how Caucasus oil was to be transported to the Reich. A quarter of a century earlier, this problem had also vexed Ludendorff and the German High Command, who never arrived at an adequate solution. The overworked Fürher may not even have realized the importance of this matter, considering it best simply to cross that bridge when he came to it. He had almost certainly not read the March 1941 report by Generalleutnant Hermann von Hanneken of the War Economy and War Armaments Office, which was appended to a letter sent by Keitel to the OKH. This report warned that, even if the Caucasus oilfields could be captured intact, very little oil (only 10,000 tons per month) could be carried overland to Germany. Moreover, even if the Black Sea could be made safe for shipping, there would be no ships available for the transport of Caucasus oil up the Danube because its river tankers were already working to capacity transporting Rumanian oil.131 The only remaining route was across the Black Sea, through the Dardenelles, and on to Mediterranean ports. Accordingly, the report concluded, 'the opening of the sea routes and the security of the tankers in the Black Sea is the prerequisite for the use of Russian supply sources in sufficient quantity to support the further continuation of the war.' Clearly, to attain this prerequisite was virtually impossible by early 1942; the Germans would have had to wipe out the powerful Soviet Black Sea Fleet (which still had, according to Raeder, 'naval supremacy ... [allowing] great freedom of movement’) and eliminate British air and sea power from the eastern Mediterranean.
Despite not considering how best to solve this logistics nightmare - which never occurred, because the German Army captured only the already-destroyed Maikop oilfield - Hitler was well aware of the need to make the Black Sea safe for German shipping. However, both he and Raeder appear to have worried more about supplying German armies via the Black Sea than of shipping Caucasus oil back to the Reich or Rumanian refineries.
When planning the forthcoming campaign, both Hitler and the German High Command placed considerable emphasis on the need to advance on the Caucasus oilfields so rapidly that the Soviets would not have time to destroy the oil wells and refineries permanently. If the latter were destroyed, the bulk of the oil would have to be refined elsewhere until new refineries could be constructed. Only Rumanian refineries, which still had a considerable surplus refinement capacity, could handle large quantities of additional crude, but (for the reasons mentioned above) it would be extremely difficult to ship significant amounts of oil from the Caucasus to Rumania.
An 'Oil Detachment Caucaus' had been formed a year earlier, in the spring of 1941,when the capture of the oilfields was still a principal objective of the forthcoming attack on the Soviet Union. Its purpose was to repair damaged wells and refineries quickly so that exploitation of the oilfields could be commenced as soon as possible. In early 1942, when the capture of the oilfield became the objective of the forthcoming attack, this detachment was expanded considerably and renamed the 'Oil Brigade Caucasus'. The expansion was necessary because recent experiences in Ukraine and the Donets Basin indicated that the Caucaus oilfields would probably not be captured before at least some attempts were made to destroy existing wells and refineries. As a result, this unusual paramilitary force was brought to a strength of 10,794, issued with 1,142 vehicles and six aircraft and ordered to stand by, ready to move into the Caucaus oilfield immediately behind the combat troops.
On 28 March, after a lengthy period of discussion, the OKH presented Hitler with a plan for the Caucasus offensive - to be code-named Fall Blau, or Case BLUE - which closely paralleled his wishes…. Spelling out the aim of the new offensive, [Hitler] declared that 'as soon as the weather and the state of the terrain provide the necessary prerequisites', it was important once again to seize the strategic initiative and, through German military superiority, 'force our will upon the enemy'. The objective this time was not only to wipe out the remaining Soviet military potential, but also to 'deprive them of their most important military-economic sources of strength.'
The general plan involved Army Group Centre holding fast, while an effort would be made to 'bring about the fall of Leningrad and link up with the Finns north of the city', and, in the region of Army Group South, a major campaign would be launched into the Caucasus….
all available forces are to be assembled for the main operation in the southern sector, with the objective of destroying the enemy forward of the Don, in order to secure the oil regions of the Caucasus and the passes through the Caucasus [mountain range] itself.
Before the major offensive into the Caucasus could commence, the directive stated, it would be necessary 'to clear the Kerch Peninsula in the Crimea and to bring about the fall of Sevastopol.' In preparation for this campaign, the Luftwaffe and later the Kriegsmarine would have the task of 'energetically hindering enemy supply traffic in the Black Sea and the Kerch Straits.' The insistence on these time-consuming preliminary operations in the Crimea reveals that Hitler still believed that the Crimea would have to be 'neutralized' entirely in order to protect Rumanian oilfields permanently from Soviet bombers. This view, it should be noted, was not only shared by General-oberst von Manstein, whose battered Eleventh Army would have to do the fighting in the Crimea, but also by General-oberst Alexander Löhr, whose air fleet (Luftflotte IV) would have to support von Manstein's ground assault. Perhaps more importantly, it was also shared by Marshal Antonescu….
After neutralizing the Crimea, Hitler's War Directive 41 stated, the main campaign could begin. Curiously, in the light of the fact that the campaign has come to be associated with the name of that city, the capture of Stalingrad was actually not a major objective. It was certainly considered by Hitler to be far less important than the oilfields. The directive stated only that an attempt should be made 'to reach' Stalingrad, 'or at least to subject this city to the bombardment of our heavy weapons to such an extent that it is eliminated as an armament and transportation centre in the future.' As the historian Gerhard Weinberg points out, it is ironic that 'the place whose name will always be associated with one of the great battles of World War II was largely ignored by the Germans beforehand and renamed Volgograd by the Soviet Union afterwards.”…
The preliminary campaign (to clear the Crimea of Soviet forces) commenced on 8 May and was brought to a successful conclusion on 3 July. Hitler breathed a sigh of relief; the Crimea was entirely in German hands and the Rumanian oilfields, his major source of oil, were safe from air attack for at least the near future.
Meanwhile, on 28 June the main campaign to seize the Caucasus oilfields had been launched and initially, to Hitler's great delight, made startling progress….
In fact, despite the total failure of the 1942 campaign, events in 1943 actually led to a slight improvement in the oil situation…. Germany's synthetic fuel industry, not yet targeted by Allied bombers, reached a production peak… the oil shortages which had bedevilled the Wehrmacht's efforts throughout the previous two years appeared far less critical. The Luftwaffe was even able to build up its meagre reserves slightly for the first time since the beginning of the Russian campaign.
[…]
History has exposed the inaccurancy of the warnings the Nazi leader received from his economists, but at that time they seemed both credible and compelling. Hitler, aware by December 1941 that he now faced a prolonged war against the world's two economic giants the Soviet Union and the United States, felt that he had no real option but to embark on a campaign which would, if successful, greatly enhance his ability to continue waging that war…
