The Geopolitics of Oil

Oil is one of the most useful substances on this earth, a fact that hasn’t gone unrecognised by world leaders. Billions of pounds and thousands of lives have been spent protecting or seizing oil assets across the globe. If a country is going to go to war, it seems that many people think large oil supplies are a decent enough reason to do so. It is impossible to ignore the historical legacy of what happens to poorly defended countries that are unfortunate enough to have oil and decide they want to keep it. It’s not so much about expanding power, as it about managing an inevitable decline.

It is easy to see why the USA, and to a lesser extent the UK, is so vilified by so many in the developing world. For decades the West has used economic, overt and covert warfare to force other countries to submit themselves to our will. I don’t subscribe to global conspiracy theories, it is simply that we live on a planet ruled by the principle of self interest over moral absolutism. Exploitation of the weak becomes inevitable. Oil may not be the only reason for war, but it cannot be denied that it is a major determining factor.

While I don’t reserve a great deal of respect for people like George Bush, Tony Blair or other warmongers, I have to concede that their foreign interventions are what has made life in the West so easy. Cheap oil drives economic growth for the countries that possess it, wealth keeps the population obedient and it makes it easy to win elections. The added bonus of sitting on top of the world’s oil supply is the leverage over other countries.

The UK and US both once had large oil and gas reserves. The technology that allowed us to extract our mineral wealth quickly also meant that production peaked and declined faster. UK oil production (as shown above, broken down field by field) from the North Sea peaked once in 1985 with 2.5 million barrels a day, once all the large fields were depleted we invested in tens of new drilling platforms, scraping production just up to our previous peak in 1999. In the next 5 years oil production dropped 50%. Gas extraction dropped 25% in just the second quarter of last year.

The US tells a similar story. Their production of oil peaked in 1970, back then they exported thirteen times as much as they imported. Today they import twice as much as they export, consuming a total of around 7 billion barrels of oil a year, 1.4 times the consumption of the entire European Union. The West needs to get it’s oil from somewhere.

Nearly half of the proven oil reserves are clustered around the Middle East. However it is worth explaining why any figures on “proven” oil reserves have to be treated with a considerable amount of scepticism. Private firms are liable to under-report their finds to avoid paying tax on an entire field, it is cheaper to continually claim to find more to reduce costs.

Whereas the rules of OPEC make it advantageous to over-state reserves, the more you claim to have, the bigger your export quota gets and the more money you make. Its also worth noting that OPEC declared reserves never get used up, Saudi Arabia has had just over 260 billion barrels of oil for the last 30 years. Venezuela is an interesting case, as in the last 3 years they claim to have tripled their reserves. If true it has meant that they’ve been able to hold on to their reserves while prices are low and can now export more when prices are high.

Despite the difficulty in getting concrete figures, the gist is that it’s not the West that has energy, but it’s the West that wants it. We got addicted to fossil fuel relatively early in the history of oil, and we’ve been in the business of extortion and theft to get our fix for a long time. The CIA have been perfectly aware of what happens to a country that runs out of oil since 1977 when they released a report on Russia’s impending crisis. There are analysts that believe the proxy war in Afghanistan in the 80’s was a tool to drain the giant’s resources, force it to pump oil to capacity, and then destroy its profits by persuading Saudi Arabia to flood the world with cheap oil. Two years after production peaked the Soviet Union collapsed. It’s an imperfect picture, but a similar fate awaits any other superpower that cannot provide for its energy requirements.

The US in it’s history has backed coups against tens of democratically elected governments in favour of despots. Both Venezuela and Iraq have had dictators installed in order to comply with US oil interests. More recently all out military intervention seems to be in fashion. Democracy or the threat of terrorism was never the goal for any of the recent wars in the Middle East. The US and it’s lapdog are simply getting their foothold on the worlds dwindling oil supplies before Russia or China.

A report was written in September 2000 called Rebuilding America's Defenses: Strategies, Forces And Resources For A New Century, it states: “The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein.” It focuses on guaranteeing the USA’s security and energy interests. It was commissioned by future Vice President Cheney, future Defense Secretary Rumsfeld, future Deputy Defense Secretary Paul Wolfowitz, Florida Governor and President Bush's brother Jeb Bush.

As it turns out, 9/11 provided an even better justification for military intervention in the Middle East. Troops were in Afghanistan less than a month after the attacks, mobilising a military that fast cannot occur without some pre-planning. Securing Afghanistan allowed the construction of pipelines to ship oil from, what was then believed to rich, oil fields of the Caspian basin.

Invasion of Iraq would soon follow. US corporations would take over management of the Iraqi oil fields, greatly in need of repair, and bring production high enough to satisfy global demand. Any oil money that made it back to the West friendly Iraqi government could be funnelled into foreign investors looking to rebuild the infrastructure destroyed in the “shock and awe” war. The notable lack of exit strategy makes sense, considering that to make a return on their investment the Western powers will want to stay until the oil has run dry.

Now Iran’s questionable nuclear weapons programme seems like it will provide the perfect cover for the US to take control of the 4th largest oil reserves in the world. It is understandable why they might want to seek to defend themselves with the ultimate weapon. Despite their hatred of anti-democratic regimes and supporters of despots and terrorists the US and UK are happy to keep supplying their long term friend, Saudi Arabia, with weapons to quell internal dissent. Instability in a country with large oil reserves cannot be tolerated, you can bet if the King does fall and chaos ensues, the US will be happy to lend a helping hand “securing” the country.

An organism faced with its own death will contemplate the most extreme measures, a country faced with its death will do little different. The geopolitics of oil have been the foundation of some of the most underhand, morally reprehensible acts in world history, I’ve barely scratched the surface. A reliance on oil has made the world a dangerous place. Things may seem comparatively stable as oil supplies dwindle and China, India and Russia begin to feel threatened. Our only hope is that we can kick the oil habit, and create a more sustainable future.

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