Oil Politics: By, Muhammad Sharjeel Hussain Namrah Hambal Mariba Daniel Noor-e-Zehra

OIL POLITICS
By,
Muhammad Sharjeel Hussain
Namrah Hambal
Mariba Daniel
Noor-e-Zehra
INTRODUCTION
• Important aspect of diplomacy since 20th century in Middle

East.
• Countries prominent emphasis on the pumping, refining,
transport, sale and use of petroleum products.
• Unconventional oil and gas developments may change the
balance of power between petroleum exporting and
importing countries.
Argentine president, Nestor

Kirchner and Venezuelan
President, Hugo Chavez
discuss the Gran Gasoducto
del Sur, an energy and trade
integration project for South
America. They met on
November 21, 2005 in
QUOTA AGREEMENTS
• Signed in Scotland on 17 September 1928.

• Discovery of the East Texas Oil Field in 1930s.
• The Commission retained control of the market until the rise of OPEC in the 1970s.
• Anglo-American Petroleum Agreement of 1944 extend these restrictions internationally but
was opposed by the industry in the United States and so Franklin Roosevelt withdrew from
the deal.
• Venezuela was the first country to move towards the establishment of OPEC by approaching
Iran, Gabon, Libya, Kuwait and Saudi Arabia in 1949, but OPEC was not set up until 1960,
when the United States forced import quotas on Venezuelan and Persian Gulf oil in order to
support the Canadian and Mexican oil industries.
OIL AND INTERNATIONAL POLITICS
• The term "petro-aggression" has been used to describe the tendency of oil-rich states to
instigate international conflicts.
• There are many examples including: Iraq’s invasion of Iran and Kuwait; Libya’s repeated
incursions into Chad in the 1970s and 1980s; Iran’s long-standing suspicion of Western
powers.
• Some scholars have also suggested that oil-rich states are frequently the targets of "resource
wars."
PIPELINE DIPLOMACY IN THE CASPIAN SEA AREA
• The Baku–Tbilisi–Ceyhan pipeline was built to

transport crude oil.
• From the western side (Azerbaijani sector) of the
Caspian Sea to the Mediterranean Sea passing
Russian pipeline.
• The United States and the European Union proposed
extending them by Trans-Caspian Oil Pipeline.
• Russia signed agreements with Turkmenistan and
Kazakhstan.
• China has completed the Kazakhstan–China oil
pipeline.
POLITICS OF OIL NATIONALIZATION
• Several countries have nationalized foreign-run oil

businesses.
• The director of the Argentine state, owned oil company
YPF, which was the first state owned oil company in the
world.
• Preceding, French Company (CFP, French Company of
Petroleum) advocated oil nationalization in the late
1920’s.
• Similarly Venezuela nationalized its oil industry in
1976. Crowds in Mexico City celebrate the
nationalization of the oil
reserves, March 1938
GEO POLITICS OF OIL MONEY
Multibillion-dollar inflows and outflows of petroleum

money have worldwide macroeconomic consequences, and
major oil exporters can gain substantial influence from
their petrodollar recycling activities.
KEY OIL PRODUCING COUNTRIES
SAUDIA ARABIA
 Saudi Arabia is an oil-based economy with strong government controls over major economic
activities.
 It possesses both the world's largest known oil reserves, which are 25% of the world's
proven reserves, and produces the largest amount of the world's oil.
 Saudi Arabia ranks as the largest exporter of petroleum, and plays a leading role in OPEC.
 Saudi Arabia is often referred to as the world's only "oil superpower".
IRAN
 Discovery of oil in 1908 at Masjed Soleiman in Iran initiated the quest for oil in the Middle
East.
 The Anglo-Iranian Oil Company (AIOC) was founded in 1909. In 1951, Iran nationalized its
oil fields initiating the Abadan Crisis.
 Iran exports oil to China and Russia.
IRAQ
 Iraq holds the world's second-largest proven oil reserves, with increasing exploration
expected to enlarge them beyond 200 billion barrels of "high-grade crude, extraordinarily
cheap to produce.
 Organizations such as the Global Policy Forum (GPF) have asserted that Iraq's oil is "the
central feature of the political landscape" there.
 According to GPF, U.S. influence over the 2005 Constitution of Iraq has made sure it "contains
language that guarantees a major role for foreign companies."
UNITED STATES OF AMERICA
 The United States is the top oil-producing country in the world, with an average of 14.86
million barrels/day, which accounts for 15.3% of the world's production.
 Much of the increased U.S. production is attributable to fracking in the shale formations in
Texas and North Dakota.
 The United States has been a net exporter – i.e., exports exceeded imports – of oil since early
2011.
NIGERIA
 Petroleum in Nigeria was discovered in 1955 at Oloibiri in the Niger Delta.
 The Nigerian economy is heavily dependent on the oil sector, which accounts for 95 percent
of government revenues.
MEXICO
 Mexico has a largely oil-based economy.
 Before 1938, all petroleum companies in Mexico were foreign based, often from the United
States or Europe.
 The petroleum industry was nationalized in the late 1930s to early 1940s.
 Though oil production has fallen in recent years, Mexico still remains in seventh place.
CANADA
 As development in the Alberta oil sands, deep sea drilling in the North Atlantic and the
prospects of arctic oil continue to grow Canada increasingly grows as a global oil exporter.
 There are currently three major pipelines under proposal that would ship oil to the pacific,
Atlantic and gulf ports.
 These projects have stirred internal controversy, receiving fierce opposition from First
Nations groups and environmentalists.
RUSSIA
High-priced oil allowed the USSR to subsidize the struggling economies of the Soviet bloc for a
time, and the loss of petrodollar income during the 1980s oil glut contributed to the bloc's
collapse in 1989.
VENEZUELA
 According to the Oil and Gas Journal (OGJ), Venezuela has 77.2 billion barrels of proven
conventional oil reserves, the largest of any country in the Western Hemisphere.
 Venezuela nationalized its oil industry in 1975–1976, creating Petróleos de Venezuela S.A.
(PdVSA), the country's state-run oil and natural gas company.
 Recently, Venezuela has pushed the creation of regional oil initiatives for the Caribbean
(Petrocaribe), the Andean region (Petroandino), and South America (Petrosur), and Latin
America (Petro America)
THANKYOU

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OIL POLITICS

• Important aspect of diplomacy since 20th century in Middle

Argentine president, Nestor

• Signed in Scotland on 17 September 1928.

• The Baku–Tbilisi–Ceyhan pipeline was built to

• Several countries have nationalized foreign-run oil

Multibillion-dollar inflows and outflows of petroleum

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