academics header
 

Oil Conflict

OIL CONFLICT

[Note: This essay is derived from Michael Klare’s Blood and Oil (Metropolitan Books, 2004).]

Conflict over the control of valuable oil supplies has been a persistent feature of international affairs since the beginning of the 20 th century. Such conflict varies in nature, ranging from territorial disputes over the possession of oil-laden border areas to dynastic or factional struggles among the leaders of oil-rich countries to major inter-state wars over the control of vital oil zones. As oil becomes more scarce and valuable, the frequency and severity of such conflict is likely to increase.

The close connection between oil and conflict derives from two essential features of petroleum: (1) its vital importance to the economy and military power of nations; and (2) its irregular geographic distribution.

Economic significance:   Petroleum is critical to the global economy because it is the world’s major source of primary energy, accounting for approximately 39 percent of global energy consumption. (By comparison, coal accounts for 24 percent of world energy use, natural gas 23 percent, nuclear power 7 percent, and all other sources 8 percent.) Oil is especially vital to ground, air, and sea transportation, providing approximately 95 percent of all energy used for this purpose.  In addition, petroleum is the basic component (or “feedstock”) for most plastics, pesticides, paints, solvents, and other vital products. Because oil plays such a critical role in fueling the world economy, any prolonged shortage in its availability can produce a global economic recession, as occurred in 1974 (following the Arab oil embargo), 1979 (following the Iranian revolution), and 1990 (following the Iraqi invasion of Kuwait ).  

Petroleum exports are also extremely lucrative, especially for those producing countries that rely on it as a major source of foreign earnings. According to the Enegry Information Administration of the U.S. Department of Energy (DoE), oil exports account for approximately 90-95 percent of Saudi Arabia’s foreign earnings, 90-95 percent of Nigeria’s, and 80 percent of Iran’s.   Oil experts are also expected to provide a very large share of the funds available to the U.S.-imposed Interim Government in Iraq . (Data obtained from the “country analysis briefs” posted at the DoE website, www.eia.dos.gov.) It is hardly surprising then, that ruling factions in these countries are likely to resist any change in government that might deny them access to prolific oil revenues.

Military significance:   Petroleum is also a vital factor in the military strength of nations, in that it supplies most of the energy used to power tanks, planes, missiles, ships, armored vehicles, and other instruments of war. Vast amounts of petroleum are consumed in modern combat operations, and so every major power seeks to ensure its access to adequate supplies. (During the 1991 Gulf War, for example, U.S. and allied forces consumed an average of 19 million gallons of oil per day – equivalent to the total daily consumption of Argentina.)   Because oil is so vital to the conduct of warfare, its possession has been termed a “national security” matter by the United States and other countries, meaning something that may require the use of military force to protect.

Oil geography:   The global distribution of oil is another key factor.   Natural petroleum does not occur randomly across the globe but is highly concentrated in a few large reservoirs. The largest of these, containing approximately two-third’s of the world’s conventional (i.e., liquid) petroleum is located in the Persian Gulf area, comprised of Saudi Arabia, Iran, Iraq, Kuwait, Qatar, and the United Arab Emirates (UAE). Large reservoirs are also found in the United States, Canada, Mexico, Colombia, Venezuela, the North Sea basin (Norway and the United Kingdom ), Russia, Azerbaijan, Kazakhstan , Algeria, Angola, Libya, Nigeria, China, and Indonesia. Together, these 22 countries possess more than 90 percent of the world’s conventional oil reserves. (The estimated oil reserves of the major producers can be found in the BP Statistical Review of World Energy.)

Oil’s Shifting ‘Center of Gravity’:   The geographic equation is further complicated by the fact that some of these large reservoirs were developed relatively early in the Petroleum Era, and so are now reaching exhaustion, while others were developed later in the cycle. And because many of the first fields to be developed (and now facing depletion) are located in the older industrialized countries of the global “North,” including the United States, Canada, Mexico, Europe, and western Russia), the center of gravity of world oil production is gradually moving toward the developing nations of the global “South,” especially Iran, Iraq, Saudi Arabia, Angola, Nigeria, and the Caspian Sea states. According to the DoE, the share of world oil production accounted for by the major Northern producers (excluding Russia ) is projected to decline from 27 percent in 2001 to 18 percent in 2025, while the share enjoyed by producers in Africa , Latin America , and the Middle East will rise from 50 to 61 percent. (DoE, International Energy Outlook 2004, Table D1.)   This is significant, because many of these producers are chronically unstable, harbor strong anti-Western sentiments, or lie in war-torn neighborhoods.

Imminence of “Peak” Oil Production:   On top of all this, it appears that the world is moving closer and closer to the moment of maximum or “peak” world oil output. Although there is considerable debate as to how close we are to this critical moment – some experts say that we are already at peak production while others say it still lies a decade or so in the future – there is no disputing about the fact that we have already used a substantial portion of the world’s original inheritance of conventional petroleum and that persistent shortages are likely to be a recurring factor of life in the years ahead. This naturally adds to the monetary and strategic value of all remaining oil supplies, and so intensifies territorial and factional disputes over its possession. (For background on the debate over “peak” oil, see Hubbert’s Peak by Kenneth Deffeyes and the books by David Goldstein, Richard Heinberg, and Paul Roberts in the Bibliography below.)

Growing risk of conflict:   For all of these reasons, the risk of armed conflict over valuable oil supplies is likely to grow in the years to come. Such conflict could take the form of conventional warfare involving the military forces of the major powers, as in the 1991 Persian Gulf War, or internal power struggles between competing political, ethnic, and tribal factions.   Indeed, by mid-2004, oil-related conflict of one sort or another was under way in Bolivia, Colombia, Iraq, Georgia, Indonesia, Nigeria, Saudi Arabia, and Venezuela.   (See section on Oil Geopolitics, below.)

Oil Production as a Source of Friction:   In some cases, these conflicts originated before the discovery of petroleum but have become intertwined with oil issues in the meantime; in others, they have arisen from the rise of oil production itself. This is so for a number of reasons:

  • Territorial disputes:   Disputed border zones and offshore areas that were thought to possess no particular value (and so were not considered worth fighting over) suddenly become very valuable (and thus worth fighting for) when oil is discovered there.   Examples of such disputed territories that have prompted arms clashes are the oil-bearing zones of the Caspian Sea (notably the areas claimed by both Azerbaijan and Iran) and the South China Sea (claimed by China, Vietnam, the Philippines, and Malaysia), as well as the Bakassi Peninsula in West Africa (claimed by Nigeria and Cameroon).
  • Separatist struggles:   When oil is produced in an area largely inhabited by an ethnic minority and the bulk of oil revenues goes to government officials in the national capital, members of the minority often perceive a strong incentive to break away and establish their own ethnic state, thereby getting all of the oil revenue.   This sort of struggle is occurring in the Aceh region of Indonesia, the Kurdish region of Iraq, and the southern part of Sudan. In some cases, such as the Delta region of Nigeria, ethnic minorities are fighting to gain greater autonomy (and a larger share of oil revenues) rather than a separate state entirely.
  • Factional and dynastic struggles:   Because whoever controls the government of oil-producing states also controls the allocation of oil revenues, those in control will seek to retain power for as long as possible, using any means necessary (including heavy-handed repression), while those excluded from power will have a powerful incentive to use any means necessary to gain control (including armed rebellion, terrorism, or coup d’etat). This sort of dynastic and factional fighting has been a consistent pattern in such countries as Nigeria and Saudi Arabia. In other countries, especially Venezuela, disputes over the allocation of oil revenues have taken the form of political violence between competing parties and interest groups.

It appears, then, that competition for oil will remain a source of conflict so long as demand rises faster than supply and the available reserves are located in areas of conflict and instability.

Data on Oil Reserves and Production

The best sources of information on global oil supply, demand, and production is available from the Energy Information Administration (EIA) of the U.S. Department of Energy, the International Energy Agency (IEA), and BP. See in particular:

 

Global Oil Geopolitics

For a comprehensive analysis of oil conflict and American foreign policy, see Blood and Oil: The Dangers and Consequences of America’s Growing Petroleum Dependency, by Michael Klare (Metropolitan Books / Henry Holt, 2004).

For a summary of current oil conflicts and upheavals, see the EIA’s “World Energy ‘Areas to Watch’” (updated periodically).

For background on political conditions in the major oil-producing countries, along with extensive links to additional information, see the “Country Analysis Briefs” produced by the Energy Information Administration.

Extensive documentation on energy politics in major countries is available from the International Energy Agency.

Many useful studies on energy geopolitics have been published by the Center for Strategic and International Studies (CSIS) in Washington , D.C.   See in particular, Robert E. Ebel, Project Director, The Geopolitics of Energy into the 21 st Century, Report of the CSIS Strategic Energy Initiative, 3 volumes, 2000.

Selected Bibliography

Fueling the 21 st Century: The New Political Economy of Energy, Journal of International Affairs, vol. 53, no. 1 (Fall 1999).

Independent Task Force on Strategic Energy Policy, Strategic Energy Policy: Challenges for the 21 st Century ( Houston : Baker Institute for Public Policy, Rice University , 2001).

Deffeyes, Kenneth S., Hubbert’s Peak: The Impending World Oil Shortage ( Princeton : Princeton University Press, 2001)

Ebel, Robert E., Project Director, The Geopolitics of Energy into the 21 st Century, Report of the CSIS Strategic Energy Initiative, 3 volumes (Washington, D.C.: Center for Strategic and International Studies, 2000).

Goodstein, David, Out of Gas ( New York : Norton, 2004).

Heinberg, Richard, The Party’s Over (Gabriola Is., B.C.: New Society, 2003).

Karl, Terry Lynn, The Paradox of Plenty (Berkeley: University of California Press, 1997).

Klare, Michael T., Blood and Oil: The Dangers and Consequences of America’s Growing Petroleum Dependency ( New York : Metropolitan Books / Henry Holt, 2004).

Painter, David S., Oil and the American Century (Baltimore: Johns Hopkins     University Press, 1986).

Palmer, Michael A., Guardians of the Gulf (New York: Free Press, 1992).

Roberts, Paul, The End of Oil ( Boston : Houghton Mifflin, 2004).

Stoff, Michael B., Oil, War, and American Security (New Haven: Yale University Press, 1980).

Yergin, Daniel, The Prize (New York: Simon and Schuster, 1993).

 
 

© 2014 Hampshire College 893 West Street Amherst, MA 01002 . 413.549.4600