News / Africa

    Will Political Turmoil Collapse the Old Oil Order?

    A rebel walks inside a destroyed weapons dump near Benghazi, March 5, 2011
    A rebel walks inside a destroyed weapons dump near Benghazi, March 5, 2011

    Multimedia

    Audio
    Joe DeCapua

    The political turmoil in the Arab world may not only lead to much higher oil prices, but greater competition for resources and a shift in priorities for oil-producing nations.  So says the author of Rising Powers, Shrinking Planet.

    What’s happening in North Africa and the Middle East, says Michael Klare, is the collapse of what he calls the “Old Oil Order.”

    “The old oil order, as I see it, is a network, a constellation of governments in the region, largely authoritarian, that were devoted to producing oil and making it available for sale to international markets.  And these governments were supported to a great deal by the United States and the West, not all of them, but most of them, because these governments favored the international market – the trade in oil,” he says.

    Klare is a professor of peace and world security studies at Hampshire College in Amherst, Massachusetts.  He says some cracks were seen in the old oil order over the years in such countries as Iran and Iraq.

    Now what?

    The new oil order that’s emerging, he says, will cater less to Western desires.

    “I think it’ll look a lot like Venezuela, in some cases, where (President) Hugo Chavez rules the state oil company, PDVSA, and uses the money for social purposes and political purposes in his country and to promote what he sees as the welfare of his people.  And he’s not very interested in improving the capacity, the efficiency of the company.  So, Venezuela’s oil production has fallen since he’s been in power,” he says.

    He says any new governments that emerge in the Arab world, whatever their political orientation, will face “tremendous social and economic challenges.”  Those challenges will arise from growing populations and high unemployment.

    “Their priority is going to be to use their money from oil production to improve employment, not to feed the thirst for oil in the rest of the world,” he says.

    Pumped up price at the pump

    Klare says, “With the demise of the old oil order, we will see the end of cheap petroleum forever.”  That means much higher fuel prices.  How high?  That depends on Saudi Arabia.

    “Saudi Arabia,” he says, “is the linchpin of the global oil order because it has the world’s largest reserves.  It is the largest supplier of oil to international markets and it has the largest spare capacity – the ability to ramp up production in times of crisis like you have today.  So, as long as Saudi Arabia remains stable and keeps producing, I think oil won’t go beyond the record it set in 2008 of about $140-$150 a barrel.”

    But, he says, if Saudi Arabia goes the way of Egypt, Tunisia and Libya, then there are no limits to how high the price of oil could go.

    “$200 a barrel wouldn’t surprise me,” says Klare.

    That could mean gasoline costing at least $5 a gallon here in the United States.  He says tapping the U.S. Strategic Oil Reserve to hold down gasoline prices would only have a temporary effect.  One thing, he says, that could cause oil prices to drop suddenly is another global economic crisis like the one in 2008.

    What's food got to do with it?

    The professor of peace and world security studies says it’s important to remember that oil and food prices are intertwined. And that prior to the economic crisis, a food crisis gripped the world.

    “While the price of oil is rising, we have also seen a huge surge in the price of food, partly because oil is so expensive.  When oil rises, the price of food rises.  And it’s been the high price of food that triggered many of the uprisings, first in Algeria, then in Tunisia and Jordan and in some of the other cases.  And the price of food continues to rise, too.  And I expect that we’ll see more uprisings about food.  And I fear that there’ll be more of this in the future because of global climate change,” he says.

    Climate change has been blamed for many droughts and floods, both of which destroy agricultural land.

    Klare says the 21st Century brings greater competition for food, fuel and water among the western powers, as well as India, Russia and China.  Sub-Saharan African oil producing nations, such as Angola and Nigeria, he says, will be pressured to solve domestic problems, while trying to meeting growing demand for oil.

    Klare says the world must develop some type of new energy system soon, not only to meet greater demand, but to deal with climate change, as well.

    You May Like

    Video Obama Remembers Fallen Troops for Memorial Day

    President urges Americans this holiday weekend to 'take a moment and offer a silent word of prayer or public word of thanks' to country's veterans

    Upsurge of Migratory Traffic Across Sahara From West to North Africa

    A report by the International Organization for Migration finds more than 60,000 migrants have transited through the Agadez region of Niger between February and April

    UN Blocks Access to Journalist Advocacy Group

    United Nations has rejected bid from nonprofit journalist advocacy group that wanted 'consultative status,' ranking that would have given them greater access to UN meetings

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora