To the countries of black gold… (Part 1) : United States: who controls oil writes history

By Raphaël Rossignol, Doctor of Political and Economic Sciences at EHESS.

Essential to the way of life of our current societies, oil is at the heart of global geostrategic challenges. A valuable source of income and a decisive lever of influence for producer countries, it is, on the contrary, a vital resource to be secured for importing countries. A decoupling of supply and demand that explains the often frictional nature of the relationships governing the nations concerned.

In a series of articles focusing on three of the world’s greatest powers – the United States (the world’s largest producer of black gold), Russia (the world’s second largest exporter) and China (the world’s largest importer) – Resources discusses in detail the specificities of each and the associated geopolitical consequences, particularly for the African continent.

Since the first wells in Ohio, oil has been at the heart of American domestic and foreign policy. The control of global reserves, by purchase, alliance or annexation, is not only about American energy security. Above all, it is a way of controlling prices (in dollars) and weighing on the economy of its strategic rivals, whether they are exporters (Russia) or importers (China). The exploitation of shale gas has given the United States more room for manoeuvre, but the windfall is neither exclusive – China has huge reserves – nor eternal.
An economy linked to the oil industry

With the discovery of the first oil wells in Pennsylvania in 1859, American industry underwent a lasting transformation. The birth of the first major oil companies, first and foremost Standard Oil, not only paved the way for the development of a new industrial sector, but also imposed technological choices on which the economies of the entire world are still dependent more than 150 years later. In the United States itself, the market power of the oil majors has made it possible to permanently eliminate solutions based on electrical energy, with, on the one hand, the purchase and scrapping of electric tramway systems in all major American cities and, on the other hand, the promotion of the combustion engine at the expense of the electric motor, both designed and industrialised in the second half of the 19th century.
In addition to the poor development of the rail system and the existence of a profuse network of roads, the oil industry has been the mother of many spin-off industries in all fields. Indeed, the multiplicity of oil-derived products makes them practically ubiquitous in daily life. A rather detailed list gives no less than 120 objects or components from the oil industry, from nylon to capsule capsules, furniture, pharmaceuticals, plastics and cosmetics. Petrochemistry, built around the exploitation of crude oil, has given rise to a diversity of everyday products that shape consumer society, a model that has spread with the standardization of lifestyles and the emergence of the middle classes throughout the world.

Through skilful lobbying and the creation of industrial monopolies, the oil and petrochemical industries have also left their mark on the course of American political history. According to Influence Map, the oil industry as a whole has spent about $115 million per year to counter conclusions about the impact of fossil fuels on climate change1. More generally, the comparison of the amounts invested in lobbying by the entire industry in the United States (about $350 million in 2013) and the amount of subsidies granted to the oil industry (about $41.8 billion, a ratio of 1 to 119)2, shows the importance of the oil sector in public decision-making in the United States.

1https://influencemap.org/report/How-Big-Oil-Continues-to-Oppose-the-Paris-Agreement-38212275958aa21196dae3b76220bddc

2 http://priceofoil.org/fossil-fuel-industry-influence-in-the-u-s/

As part of the embargo put in place from 1990 to 2003 against the Iraqi regime, the UN « Oil for Food » programme, initially conceived as a « temporary measure to cover the humanitarian needs of the Iraqi people », quickly gave rise to a vast system of corruption involving at least one American oil company, Texaco3, as well as many small oil companies named in the investigation report led by Paul Volcker, who were eventually able to work for majors. The outbreak of the Second Gulf War in 2003 and the creation of the Coalition Provisional Authority precipitated the end of the Oil-for-Food Programme, and signalled a conflict in which control of Iraqi fields would become one of the drivers, the Bush Jr administration being populated by former representatives of the oil industry, starting with the Bush (Harken Oil and Zapata Oil), Dick Cheney (former president of Halliburton) and Condolezza Rice (Chevron Oil administrator until 2001).

3 https://www.ft.com/content/1f250dd4-47de-11da-a949-00000e2511c8

The priority objective: to control the supply of competing powers at source

However, it would be simplistic to consider that the appropriation of oil reserves is the ultimate or central goal of American interventionism. With the exploitation of shale gas, the United States has become self-sufficient in hydrocarbons. The increase in shale gas production from 2008 onwards gradually enabled the United States to move closer to energy self-sufficiency by 2018. The implications for US foreign policy are significant, since in the short term, the protection of maritime corridors and the « security » of war zones in the Middle East cease to have as their primary objective the provision of energy security for the United States, if that ever was the case. Indeed, the control of the world’s main oil reserves makes it possible above all to control the access that could be granted to competing powers (including China), to threaten Russian oil export routes in Central Asia and Eastern Europe, and to obtain contracts from American oil companies. 

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