6 pages/≈1650 words
Global oil industry (Essay Sample)
This is an argumentative essay holding the position that the global oil industry affects international relations. source..
Student’s name Instructor’s name Course title Date Does the Global Oil Industry affect International Politics? After industrialization of the world in the 19th century, oil came up as the chief source of energy for the global economy replacing the use of coal. The upsurge of industries and the invention of motor vehicles increased demand for fuel in the countries of Europe and in Northern America where civilization had come of age. From the start of the 20th century, oil becomes the most important commodity in the economies of the developed country. This made it be entrenched into international politics as countries struggled to gain an advantage on key oil sources. Betts, Eagleton-Pierce and Roemer-Mahler believe that towards the Second World War United states was the biggest producer and consumer oil in the world (4). This contributed to its growing economy and political superiority in the world. Other countries in Europe such as Britain and France were also in control of the vast oil sources in the Middle East through their oil drilling and refinery companies. The links between international relations and the oil industry is evident is several aspects. These include international trade, foreign policies, the issue of sustainable development and environmental conservation. The oil industry affects the world’s economy directly, and this is reflected in the manner crude oil prices affect the foreign exchange prices and prices of commodities internationally. Thus, the global oil industry affects international relations directly. Despite the huge amount of oil reserves owned by the developing countries in Middle East, Africa, and South America, the producing companies are from North America and Europe (Marc Baaij, de Jong, and van Dalen 791). The complexity of drilling oil had made it difficult for national governments to invest directly in the business. The governments made a deal with producing consortia who are directly involved in the drilling and exploration of oil reserves. The major oil producing companies are about seven in the world, and they have formed a cartel to protect their interest and have a bargaining power against governments (Marc Baaij, de Jong, and van Dalen 789). The Economist identifies the major producing companies as BP plc(United Kingdom), Chevron Corporation(United States), ExxonMobil Corporation (United States), Royal Dutch Shell plc( Netherlands and United Kingdom), and Total SA(France)(1). These five companies are today referred to as “supermajors” because of the huge control they have in the oil industry (The Economist 1). These companies started their dominance in the oil industry in the 1950s, and they have rapidly grown to hold control of their entire global oil producing industry. However, there is an indication that the control of the major oil producing companies is dropping as National Oil Companies are taking over the production of oil (The Economist 1). Oil Industry and International Politics The oil industry is tightly linked to politics because of its importance to the economies. The oil exporting countries want to get the best value for their products while the importers want to have a guaranteed supply of oil at affordable rates (Hillebrand 737). At the region level, Middle East is in focus because of the large oil reserve possessed by several countries in the region. Most of the countries in the Middle East depend on oil exports to sustain their economies(O'Hagan 44). The countries in the region also have a common culture based in Islamic laws. This has helped the region to develop a strong bond that helps them to bargain with other countries. For example, the United Arab Emirates consist of several Emirates in the gulf region that depend on oil. Their unity has enabled them to create a large economy and bargain collectively on economic matters (Odell 315). Luciani also notes that call for pan Arabism is gaining more support as the Arabic oil producing countries are seeing the point of coming together as a strong union (97). The Middle Eastern region has also experienced conflicts because of the oil. The 1990 Gulf war was initially a dispute between Iraq and Kuwait. This was before United Nations collation forces led by United States went to support Kuwait against Iraq. Iraq invaded Kuwait claiming that possession of some oil-producing region. Iraq was also not pleased because Kuwait was overproducing oil contrary to their OPEC q...
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