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Geopolitics Of Oil Essay

1454 words - 6 pages

4

GEOPOLITICS OF OILWhoever commands the ocean commands the trade of the world, and whoever commands the trade of the world commands the riches of the world, and whoever is master of that commands the world itself(John Evelyn, 1674)Oil is the world's most important commodity. Without oil, today's industrial society would simply be impossible. Oil and natural gas are the fuel for the engine of modern capitalism. It is also by far the largest single commodity in international trade, and the oil industry is one of the largest and most international of all industries in the world. That is why it is important (Sepehri 2002). No other element has shaped the history of the past one hundred years so much as the fight to control the oil reserves of the world. The political and the economic power around oil have been shaped by the control of various influences.Most of the oil consumed in the world today has moved from one country to another. The companies themselves are exclusively US and Western European origin. But the crude oil is mostly concentrated in a small number of countries in the Middle East and Latin America, and was owned by the governments of those countries. One factor was the fact that the crude oil in these countries was incomparably cheaper than other sources of energy (Parra 2004).As far as the facts go, a majority of the oil producing nations are politically unstable or at opposing sides with the US. Many of such producers are members of the Organization of Petroleum Exporting Countries (OPEC). Gulf oil is also much cheaper to produce, making it much more profitable. Production costs for Persian Gulf OPEC nations are about $1.5 per barrel compared to about $4.5 in the U.S., $5.5 in Canada,$7 in the Caspian Sea, and as high as $10 a barrel in Russia. OPEC countries produce 40% of the world's oil and hold 80% of the proven oil reserves out of which, 85% are in the Middle East. Thus, the oil producing nations can be clubbed into two categories, those that suppress and those who can be suppressed. Thereby, it gives rise to geopolitics surrounding the supply of crude in the world.Beyond financing war, natural resources have been depicted as an important motive of several wars in the 1990s, from the Iraqi invasion of Kuwaiti oilfields, to civil wars fuelled by diamonds in West Africa (Le Billon, 2005). According to Engdahl (2005), oil is the central theme for countries to execute their policies. No matter the reason, oil can be traced back and be seen as one of the motive for countries. The attack on Iraq is reasoned by the United States as a humanitarian intervention to uphold human rights and stage a democratic country. In the event of a U.S. invasion, Iraq would become a vast source of cheap oil under U.S. control which could be used to undermine OPEC. At some 112 billion barrels, Iraq now has the second largest proven reserves in the world after Saudi Arabia's 265 billion barrels. And like all other Middle East oil, Iraqi oil is cheap...

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