Prospecting the academic grounds on global energies patterns

Strategic pricing for a strategic asset

A strategic asset

In his book “The rise of the new oil order” , PM Wihbey insists on the political premium included in the price of energy.

“Energy sources, he argues -oil, natural gas, LNG, nuclear- have replaced the nuclear arsenal machinations of the Cold War as the key instruments of power and statecraft”.

Iraq invasion following the 9/11 was taken in this perspective. “The final and full reappraisal of the country’s energy policy was to maintain the tried and true Opec driven global oil system- replacing OPEC’s Saudi leadership with an Iraqi one, in the faulty belief that Baghdad could rival with Saudi Arabia […] There was no genuine effort to re-evaluate and reformulate the world’s most critically important commodity market. It was just a poorly executed power of grab of an old and crumbling system- OPEC, based on calculations that were mired in the depths of the Cold War.”

[Question  from the interviewer Anne Gaudard] : You mean that the United States maintained low oil prices during the Cold War against the Soviet Union?

Yes, to undermine the Soviet economy. When the Cold War came to an end, low price levels were maintained and the world enjoyed strong economic growth, in effect the so-called peace dividend. However, this situation changed in 2001 with the attack of [11/9]. As a result, the geostrategic alliance between the United States and Saudi Arabia collapsed. The OPEC driven and regulated oil market ceased to exist.”

“The emergence of national oil companies, resource nationalism, high price volatility, market speculation, and the push for non-carbon renewable energy sources are all attributable to Washington’s termination of it alliance with the Saudis.”

The view of oil as a strategic asset is shared by many specialists : Samir Saul in  Comparative history of National Oil Companies would add “The oil sector is not limited to economic activity; it is intimately connected with international relations and with States’ foreign policies. Whether it is a question of access to resource or of warding off the repercussions of a crisis in a armed conflict, oil always has a political dimension […] The merchandise that we call oil does not obey the law of the highest price only; it is subject to the fully political considerations of supply safety […] The stability of supplies at a good price calls for any form of assurance, either by controlling the raw material, the finished product or firms working in the sector, or by way of an understanding.”


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