Oil and Geopolitics Social Studies 11 K.J. Benoy

Oil Issues  The Developed World, and the USA in particular, will become increasingly dependent on imported oil & gas.  Economic growth rates and changes in oil recovery may modify this somewhat.

Oil Issues  However, demand from the developed world is no longer the over-riding concern it once was.  Demand in Asia is set to become a huge factor – the dominant market by  China is particularly important and is already bidding against the US for some Central Asian supplies.

In the Past the Developed World Dominated Demand

Trends Show Asia Will Soon Become the Dominant Consumer

The Middle East & Gulf Will Continue to Dominate Oil Supplies

Comparative World Oil Reserves By Region

The Life of Current Oil Reserves at Present Consumption levels Concerns us all

Three Regimes Hostile to US Interests Are Crucial For Meeting World Needs

Europe & North America Will Continue to Dominate Gas Use

The Middle East & Former Soviet Union Will to Dominate Gas Supplies

Gas Uncertainties  Gas production is harder to estimate than oil. – The kinds of reserves vary and their economic usefulness differs. – Central Asian & Iranian reserves are uncertain. – New gas liquids technologies may alter the equation significantly. – Transportation issues are a huge concern. How is this gas to be brought to market. Pipelines will have to go through politically unstable areas – like, possibly, Afghanistan. Even Russian stability is uncertain.

Industrialized and Industrializing Nations Are All Concerned With Ensuring Future Supplies  Unrest in the Middle East and Central Asia could threaten our very way of life.  Ensuring continued flow of supplies has been a geopolitical concern since industry shifted from coal to oil and gas around the turn of the 20 th Century.

Central Asia  The big players in Central Asia are Azerbaijan, Kazakhstan and Turkmenistan.  All are landlocked and dependent on shipping supplies through neighbouring countries.

US Interests  As the world’s leading consumer & the only real super-power, the US takes a huge interest in the politics of Central Asia & the Middle East.  showed the depth of anti- Americanism in the region – particularly in major supplier Saudi Arabia – home to most of the terrorists  Iraqi and Iranian hostility also continue.

US Interests  Since the early 1990’s the US has maintained bases in Saudi Arabia.  Osama bin Laden & others call it an affront to Islam to have foreign “occupiers” near their holy sites.  The Saudis have asked for these troops to be removed.

US Interests  The US also maintains bases in Kuwait, Bahrain, Qatar, Oman and Turkey.  Israel is also a reliable ally in the region – though politically this is a liability in regard to relations with Arab countries.

The Iraq Confrontation  It is clear that a friendly regime in Baghdad would be most helpful as American reliance on oil imports increases.  Rebuilding after a war, Iraq would certainly want to build market share at the cost of OPEC nations.  This would drive oil prices down for some time.  Along with Former Soviet supplies, it would force the Saudis to lower prices to try to maintain its share.

The Iraq Confrontation  The war that US hawks, like Rumsfeld and Cheney, seem to favour, comes at a risk though.  Saddam Hussein is not liked by his neighbours, but the prospect of an American-British occupation of an Arab country could spark uproar in Jordan, Egypt, Algeria and elsewhere.

The Iraq Confrontation  Anti-American feeling is deep in the Arab world as the US is seen as an imperial power.  None of America’s Arab friends are democratic and several are unstable.  Even Pakistan could be destabalized  An Iraq war runs the risk of bringing to power fundamentalist governments in the region – exactly what Osama bin Laden hoped would happen in the post crisis.

The Iraq Confrontation  American & British belligerence is driven by a number of factors: – Hussein’s violation of Gulf War peace terms. – A desire to rid the region of this despot. – The need for secure bases in the region. – The desire to drive down oil prices by marginalizing OPEC. – The belief that military superiority ensures a short conflict with few casualties.

Will George Bush Open Pandora’s Box?

Bibliography  Arvanitopoulos, Constantine. “The Geopolitics of Oil in Central Asia,” Thesis; Journal of Foreign Policy Issues. Winter,  Cordesman, Anthony & Sarin Hakatoryan. “The Changing Geopolitics of Energy – Part II,” Center for Strategic and International Studies August 11,  Roberts, John. “Another War for Oil?” Geopolitics of Energy. Issue 24, November/December, 2002.