By Melvin A. Conant
Conant explores how the transformation of oil from a advertisement commodity to a strategic uncooked fabric have replaced the face of worldwide power politics. In an more and more interdependent international, Conant questions the suitable of any country to withold very important offers from different nations.
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Additional resources for Access to Energy. 2000 and After
The examples of Mexico, Iran, and Venezuela are illustrative because each in its own way and time contributed to the gradual shift in the control of oil from the international oil companies, supported by their own governments, to the governments of the producing countries. By 1900, the United States and Russia dominated world supply, producing more than 90 percent of the world's oil. Production in the United States vastly exceeded consumption, with the result that many American firms began to market petroleum products abroad.
Payments to government were for the development of oil resources and their eventual sale in the market. The arguments that developed in Venezuela with the companies, however, and that occurred later in the Middle East, were over the issue of government revenue: was it a fair share? The force of Venezuela's argument was lodged in the inescapable fact that economic development and social progress depended totally on the realization of the greatest possible return from the companies' exploitation of oil.
As a result, the concession system came under increasing attack not only because the terms were lopsided in favor of the companies but also because the concession system symbolized the practical continuation of colonialism even after political freedom had been achieved. Thus, even after most of the oil-producing states thought they had achieved full sovereignty, the perpetuation of the concession system remained a constant reminder of an earlier, dependent colonial-style relationship. Because of this legacy, the newly emancipated oil producers soon began to press for a greater share of the benefits from the exploitation of their oil.