The Impact of Oil in Global Politics

Oils Impact on Global Politics

Fluctuations in oil prices are heavily discussed in the media and are often the focus of economists and politicians alike. But why does oil receive so much coverage? Why is it so important? The answer to this question is complex and involves a multitude of factors. Oil is a resource which is incredibly scarce and crucial to the functioning of 21st Century economies. We need oil to fuel our cars, aircraft, machinery and trucks. Without this vital resource, our modern economies would grind to a halt. In the past, oil was also needed to fuel production in industry, however nowadays oil is mostly needed to fuel vehicles. Whilst there has been attempts to reduce the importance of oil, by using more renewable energy sources, little progress has been made and our reliance on oil has only increased.

This reliance on oil has meant that for over a century oil has been influencing world politics and influencing governments’ foreign relations. This is especially true of the United States, which hasHow Does Oil Influence International Politics been dependent on foreign oil to fuel their booming industries. In fact, it is these booming industries in the late 1800’s and early 1900’s, that sparked of Western independence on oil as an energy source. Since then, as their economies have greatly expanded, the West’s need for foreign oil has increased accordingly. It is little known, but at the turn of the 20th Century the United States was actually one of the major oil exporting nations. In fact, in this period the United States actually exported oil to Saudi Arabia, as oil reserves were only discovered in Saudi Arabia after the First World War. Once American domestic oil reserves began too be diminish, the United States needed to export oil from abroad.

If someone were to ask an economist the questions, “Why are we so dependent on oil?” and “Why does oil have such an impact on world politics?”. They would reply that oil has unique properties that distinguish it from most commodities. Oil is a resource which is scarce, it is only found in certain parts of the world and there is a limited number of suppliers in this market. Additionally oil is a commodity with few substitutes; our vehicles and aircraft need fuel to function (with the exception of electric cars). An example which illustrates this point is as follows: Imagine if the price of rice were to soar tomorrow, consumers would gradually switch to an alternative good, maybe barley or potatoes. However when the price of oil rises, there are no real alternatives. This is what makes oil such a unique commodity, its importance, scarcity and lack of real substitutes.

How Does Oil Influence International Politics

Oil influences international politics in a multitude of ways. Governments have always sought to serve their countries’ self interests and this is especially true with respect to securing their energy requirements. Oil has influenced countries foreign relations and even influenced their decisions to go to war. As I write this article, NATO is currently launching air strikes in Libya to weaken the Muammar Ghaddafi regime. Whilst NATO’s decision to undertake these sorties may not be solely due to Libya’s oil reserves, there is no doubt that oil has influenced many of the parties decisions to be involved in this costly endeavor. For example out of all the countries involved in Libya; France has spearheaded the operation.

One would normally expect countries like the U.S. or the U.K., who have more powerful militaries, to take on a more predominant role, but in this case France has. Under closer examination, the reason why is very clear, France imports a large amount of oil from Libya, and they are obviously trying to secure there supplies for the future.

The same can be said of the Gulf War; in this case it was the United States who spearheaded the operation, by launching Operation Desert Storm, with a coalition of other countries. The goal of this operation was to protect Saudi and Kuwaiti oil reserves from the volatile Iraqi dictator, Sadaam Hussein. The dangers of Iraqi domination of Arabian oil were too much for the US to accept. Had the coalition not intervened, and Iraq subsequently captured these oil reserves, the balance of power in the region and the world would have been dramatically altered. It is therefore clear that oil was a critical factor in initiating the Gulf War. Many people have attributed the current Iraq war to have similarly been about oil, when in fact in this case oil was a motive, but not the prime motive. It is certainly true that the coalition wanted to secure Iraq’s oilfields into more friendly hands. However, I think that George W. Bush’s prime motive was really to defeat a regime he viewed as an opponent to world peace.

American and Saudi Relations Due to Oil

Oil has influenced many countries foreign relations in major ways. This is certainly true of American-Saudi relations, which have been built out of the two countries oil trade. This relationship goes back to the period before the First World War, and was solidified by Franklin Delano Roosevelt. This is most strongly demonstrated by historic meeting of Roosevelt with Ibn Saud upon the USS Quincy. Out of this relationship many other relationships have sprouted, such as military cooperation and financial relations (Saudi’s hold huge reserves in American banks). This demonstrates the tremendous way that oil has influenced a countries foreign relations and posture in global politics. Had Saudi Arabia not had this mass of oil wealth, it is arguable that the two countries foreign relations would be very different.

It is very clear that oil plays an active role influencing global politics in a major way. Oil has influenced governments’ decisions to go to war and at the same time has influenced their relations with other countries. International politics is fraught with alliances and divisions, and it s undoubtedly true that the oil trade has influenced these relationships. What is most noteworthy of all is that the West’s need for oil has only grown with time. This means that till an alternative energy source is discovered, or the oil reserves are depleted, oil is going to continue to influence international politics.

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