Politics of Oil Opec

: INTERNATIONAL POLITICAL ECONOMY

JUDITH. M. WATA

EXAMINE THE UTILITY OF ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC) IN THE POLITICS OF OIL

Introduction

The oil resources of the world are unevenly distributed over the earth’s surface and the concentration of the reserves is not geographically coincident with the concentration of consumption. Energy resources due to their specific nature are key product and strategic commodity in today’s international society. Industry worldwide is dependent on the resources for survival and their cost will always affect the price of the finished product, thereby controlling energy supply is a powerful tool in today’s international market.

Harold Laswell (1936) defined politics as who gets what where when and how. Therefore the politics of oil can be viewed as the production and distribution of oil in the international market.

Formation of OPEC

South East Asia and Southern Europe including Russia were important oil producers in the latter 19th century. Only the U.S.A was substantially industrialized, possessing within its borders the capital, the skills the technology and the organizing capacity required to exploit them successfully. With these advantages and a large domestic market the United States became pre-eminent in the modern technology of drilling and refining and quickly became the world’s largest exporter of oil products it remained so until the Second World War. The U.S.A also perhaps the world’s most advanced with respect to large scale business organization and its large oil companies were capable of following up their successes in export markets not only with the successful acquisition of foreign crude oil. But also the international “majors” which were Exxon, Chevron, Mobil, Gulf oil, Texaco, British Petroleum and Royal/Dutch Shell this formed the integrated companies the first five are American and the other two are British and they dominated...