Globalization and Petroleum

Globalization as a Complex Interactive Process Impacting and

Structuring the World Petroleum Industry

I. Introduction

Globalization is a worldwide phenomenon where previously national markets are linked and integrated to create a global market. This occurs both within specific industries as well as those industries becoming embedded within a global economy larger than the sum of the domestic economies which were its original constituent parts. The oil and gas or petroleum products industry is examined as an example of these linkages. We examine the petroleum industry first with respect to its production or supply side, the demand side, and a worldwide pool of labor which is its most fundamental basis. To really grasp globalization in its most expansive sense and true context one should look not just at its economic side, but also at the governmental, sociocultural, and technical sides of this phenomenon. The way in which these different dimensions and sphere of globalization interact and flow into one another explains how it is that changes in one side of a global industry can spread across and influence other dimensions. The interactions and linkages between different dimensions of a global whole and also of a global industry show how change can occur so suddenly in the ways we have observed in the past few decades.

As domestic economies and national markets achieve integration with one another we see a broad global process resulting in an increasingly rapid exchange of products, capital, and labor over national boundaries happening at a much larger scale and with a quicker pace never seen before. While international trade has occurred since almost the beginning of human civilization, the amount and complexity of international exchange has expanded in the last three hundred years and continues to do so at an increasing rate. The entire undertaking of imagining, designing, fabricating, marketing, and the distribution of services and products currently...