Globalization has smiled broadly on the oil sector. It sits on top of the pile as a colossus, keeping a close eye on the turn of events, or often turning the events themselves. The power of the industry has been such that wars have become an opportunity, as seen in the case of Iraq. This is not really a new phenomenon, although the growth of the industry, including its mergers, has been phenomenal. According to Oilwatch International, since the wealth of oil corporations began to spread beyond the national markets of the countries in which they operated, they began to checkmate nation states throughout the world. This has resulted in wars between the big corporations and nation states. One such war began in the US when the first Standard Oil abridged the 'democratic' functioning of the state at the end of the 19th century. The confrontation spread to England, where the state struggled to control the powers of Royal Dutch Shell.2
The current situation in the Middle East, particularly Iraq, has shown in stark colours the interwoven nature of politics, conflicts and oil resource appropriation. It is a common belief that the entire Iraq war effort is all about oil, even though the trumpet had sounded the alarm over purported weapons of mass destruction. Those weapons turned out not to be hidden in some evil dictator's laboratory, but in the turrets of high-tech weapons manufactured by what has been termed the weapon dollar industry. This, however, may not be the entire question.
The wedlock between the industry and keepers of ill-gotten wealth is so rampant as to deserve no special treatment here. It is enough to say that states such as the US and Switzerland have become strategic recipients of slush funds from corrupt politicians and other crooks. The Iraqi situation has also shown how companies involved in the production or use of arms, as well as those engaged in the oil industry, benefit directly from systems that completely suspend even minimum concerns about basic standards of competitive bidding or any recourse to transparency. What this shows is that oil and power corrupt absolutely.
It should be instructive that at a time when oil fields have become hotbeds of conflicts and insurgency, it is precisely then that oil companies make record-breaking profits. Those involved in weapons trade, deconstruction/
reconstruction, private soldiers' contracting and the like also enjoy the boom. In the month of October 2006, when Iraqi civilian casualties of 3709 were recorded, a market analyst stated that Halliburton's quarterly profit was 'better than expected'. By the last quarter of 2006, it had enjoyed an inflow of up to US$20 billion from the Iraqi war alone. There is no need to keep track of its winning streak.
The question still remains: are energy conflicts ever local? It does appear that the answer to this question is negative. It has to be because the impact of the use of fossil fuels as the main energy source has global repercussions and effects. A glaring example is climate change. When man's contribution to the phenomenon is considered, the direct culprit can be traced home to an oil or gas well. The gasoline, diesel or gas may originate from Nigeria, Ecuador, Myanmar or Iraq; but the impact knows no national boundaries. The conflicts may be localized; but the impacts reach a wider world through a rise in energy costs, as well as through the displacement of local peoples and the ensuing drastic increase in environmental refugees.
The conflicts generated by the oil sector are sometimes played out of sight in some remote oil field, away from the media glare, and are thus allowed to go unquestioned. An example is the socio-economic conflicts generated when oil workers with 'large' sums of money in their pockets enter poor communities. In some cases, such as in Nigeria, oil companies speak of paying some community people monthly allowances even though the people do not work for them. This builds a body of company loyalists who work to thwart legitimate demands or expectations from individuals outside the sphere of this favour or even from the community. In the ensuing conflicts, people who ought to stay in solidarity are pulled apart and become antagonists - and the winner is the oil company. When these seething conflicts escalate, the way is open for both the oil corporations and the state to militarize the area. A militarized zone provides cover for the oil-sector companies to avoid accountability over oil spills and other acts of aggression against people.
A report on the 1973 Egypt-Israeli conflict and the expected impact upon oil supply gives an important message about the convergence of oil, politics and conflicts. The Saudis warned Mobil, Chevron and Texaco of an imminent attack on Israel by Egypt and the possibility of the use of oil as a political weapon in the conflict. The companies took steps to offset the effect on oil supplies by raising oil production in the first quarter of the year and this fully compensated for the eventual drop in the last quarter of the year (Shaxson, 2007, pp83-102).
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