Oil and its Politics – 1
Published In 2019 Edition
Introducing the first part of the story on how a liquid used to obtain kerosene for lamps in the 19th century happens to become a commodity that drives global politics in the modern world today.
Petroleum industry races back from the early 19th century, when it was first found in a town of Pennsylvania, well, back then nobody knew that from lighting lamps to cementing and medical purposes, this product of fossil fuel would lead towards invention of internal combustion engines (transformation of Global transport) to becoming the most sought after commodity of the modern era. Besides, who could’ve imagined it would change the course of wars, leave alone its consumption and control would disrupt world politics.
Yes, the Americans found it and the first commercial crude oil drilling rig was successfully facilitated at an Oil creek in the United States lead by Edwin Drake, also entitled as the Father of Petroleum industry. However, it was not him who changed the scenario of the entire Oil industry. It was, the John D. Rockefeller (I can’t help adding the extra ‘the’ here) who not just altered but opened massive doors for the industry. Until the time of post-Civil War in America, people were only aware of using refined crude for extracting kerosene and used it for lighting purposes. With respect to the defined purpose, only 60 per cent of the refined crude was utilized whereas the rest was all seeped as waste in rivers and sludge pipes.
And here comes the man who dramatically drove the industry like a leader who possibly understood the industry from its scratch. Rockefeller not only shifted his business to oil refineries to extract only kerosene but also to yield gasoline, lubricants, paraffin wax, petroleum jelly and other by-products. Since he understood the composition of the oil, he soon established the Standard Oil Company. Standard Oil Company later got dissolved into several smaller unit companies; however, ExxonMobil and Chevron are still highly active from the basket.
Well, even if one may wonder whether US has been the oil driven price maker of the World ever since?
The answer would be precisely No!
The sudden upspring of the oil business in America captured the attention of many elite families across the world. The early 1990’s witnessed the rise of Big Oil and the Supermajors, forming the Anglo Persian Oil Company which is currently known as British Petroleum, Royal Dutch Shell, Chevron, Conoco Philips and the previously mentioned ExxonMobil. Ironically, today as a group these super majors only control 6 per cent of the global Oil & Gas reserves.
The curiosity arouses for the rest of 88 per cent and to answer that curiosity, it is the OPEC cartel that controls the majority of the global oil and gas reserves.
The Organization of Petroleum Exporting Countries (OPEC) was founded much after the World War 1 in Baghdad to coordinate the global petroleum prices and to provide the member countries with methodical and financial aid.
I would like to cease one’s thoughts here, and would like to highlight some intermission happenings;
What really happened in between the time when the only use of crude known as kerosene to time when economies of countries started to depend on the same crude?
A war happened. The Great War!...
In my perspective, what made World War 1 “The Great” was because hundreds of millions of lives lost, but more prominently, also because it was a war between men and the machine and these machines were fuelled by oil.
A war that started with horses for mobilization ended with war tanks. The era wherein one horse on the field for every three men was the simple modes that dominated the war eventually turned in this transformational skirmish.
Throughout the war, the energy transition took place from horsepower to gas-powered trucks and tanks and, of course, to oil-burning ships and airplanes. Innovations led these new age technologies which were immediately used for action on the dreadful battlefield of World War I.
For instance, Britishers were the ones, who set out to overcome the stalemate of trench warfare by devising an armoured vehicle that was powered by the internal combustion engine. Under its code name “tank,” the vehicle was first used in 1916.
During the World War 1, oil not only led to the mechanisation and industrialisation of the world’s armies, but became a reason for armed conflict itself. Correspondingly, the thirst for petroleum led the war to expand into scales never seen before resulting in the horrific history of total war during the 20th century.
It was during the war that oil first gained status as a distinguished commodity, strategic to the national security of the becoming of superpower nations.
And why would it not be, it was the first contest to be fuelled by oil. In the history of warfare, petroleum possession became the lifeblood of armies and it entered into the strategic manoeuvrings of armies of all nations.
With the outburst of WW1, it became imperative how important oil was to the defence of the nation. It was needed for trucks, tanks and warships. Not only the ground army, but the run up to WW1 saw a naval arms race as the world’s superpowers updated their navies too. Modern warships were converted from coal-burners to run on oil as it made them faster and stay at sea for longer. Airplanes also took on a greater importance as the war progressed – they were increasingly employed in combined - arms operations. Oil modernization dominated the battlefield and industry were required huge quantities of oil to mass-produce these weapons of war.
For the first time in history, territories were specifically captured to possess oil fields and resources, which were vital in the continuation of not only this war of attrition, but also for strategic advantage in future wars.
The war ended with its repercussions but what changed forever was the face of Oil for the world. It had arrived and it was here to stay. The acquisition of Middle Eastern Oil became a strategic priority for low producing Oil countries and countries rich in Oil were suddenly at a place of dominance aiming to secure their reserves.
Just a few years back on the Iraq invasion, a US Senator, Chuck Hagel made a controversial remark, “People say we’re not fighting for Oil. Of course we are.” “They talk about America’s national interest. What the hell do you think they are talking about? We’re not there for figs”
Oil, the “central factor” in world politics and the global economy, and in how people live their lives, is still consistently coupled to war, not deviating from the history it created a century ago during and in the aftermath of the World War 1. Created during this war, and in the wake of its untrue peace, it has shaped all surfaces of history, and all that has come to pass and will pass, until alternative energy sources remove oil’s monopoly of power-politics.