The world consumes approximately 90 million barrels of petroleum daily.
A barrel equals 42 US gallons or 159 liters.
Historical Context of Petroleum
Petroleum is a recent significant commodity.
Known since ancient times, used as flammable substance.
1840s-1850s: Experiments in Europe and America as a replacement for whale oil.
Development of Petroleum Industry
Kerosene distilled from petroleum - cleaner and cheaper than whale oil.
Sparked a revolution similar to a second Industrial Revolution in Europe and America.
By the 1860s-1870s, commercial petroleum extraction began.
The Rise of Oil in America
Early 20th century: Petroleum boom in the US.
US was the top oil producer in the first half of the 20th century.
Mass production of internal combustion engines and automobiles increased oil demand.
The Role of the Middle East in Oil
Early oil exploration in the Middle East began in the 1920s.
Massive discoveries, like the Ghawar oilfield in Saudi Arabia (1948).
By the 1970s, the Middle East became a primary region for oil export.
The Seven Sisters
Seven dominant oil companies controlled 85% of the world’s oil production pre-1970s.
Composed of Anglo-Persian (BP), Gulf Oil, SoCal (Chevron), Texaco, Royal Dutch Shell (Shell), Standard Oil of New Jersey (Exxon), and Standard Oil Company of New York (Mobil).
Decline of the Seven Sisters
1970s: Shift in control to national companies and OPEC.
Declining reserves in Western countries.
Rise of supertankers reduced transport costs.
Nationalization of oil in developing countries.
Formation and Influence of OPEC
OPEC formed in 1960, has grown in power since.
Shift from Western domination to Middle Eastern control.
Modern day: OPEC controls about 88% of global oil and gas reserves.
Conclusion
Shift from "westernized" to "arabised" oil control from 1900-1950 to 1970s-present.
Understanding the present petroleum power dynamics requires understanding OPEC's role.