The Prize: The Epic Quest for Oil, Money and Power | Review

1514 words (6 pages) Essay in International Relations

23/09/19 International Relations Reference this

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BOOK REVIEW:

THE PRIZE: THE EPIC QUEST FOR OIL, MONEY AND POWER

The book “The Prize: The Epic Quest for Oil, Money and Power” by Daniel Yergin opens to the reader the whole new understanding and significance of oil and its role in international policy and relations during the peace and wartime period. In my opinion author presented a well-researched book with good examples and cases that will be both interesting who are familiar with international relations and oil, and who are not.

Author describes detailed history of oil throughout almost one and a half centuries, since 50th years of the 19th century and till 1991. Written in a plain language, the book is full of historical, regional geographic and political excursions, psychological portraits of the main participants of the oil market, as well as secret backstage intrigues of various states and economic aspects of the world economy unknown to a wide circle of readers. Further, I will show how author covered the role of energy, particularly oil, in national security and in international relations in all 5 parts of the book, each of which covers a certain stage in the process of turning oil from an unimportant natural resource into a powerful tool in the struggle for world domination.

The first part highlights the most turbulent period in the development of the oil industry — from the beginning fifties to the First World War. Of great interest is the story of the birth of the first oil empires Standard Oil Corporation of J. Rockefeller in the United States and the company of the Nobel brothers in Russia, which were a powerful catalyst for the development of world capitalism. By starting to work in a competitive environment and implementing a strategy to reach the entire business chain from production to sales of finished products, both companies achieved remarkable success. After many years, this process will be called “vertical integration”. At the turn of the century, the political goals of great countries in relation to potential oil-exporting countries dominated the economic ones.

The second part of the book covers the period from the First to the Second World War. The First World War for the first time in history showed the role and importance of oil for military purposes and national security. At the end of the war, it was rightly said that victory was in a sense a truck victory over a locomotive. In order to regulate limited resources, the Allied Conference coordinated the distribution of oil and was a prototype of OPEC. After the successful use of oil during the war, the world demanded more and more oil for the purposes of economic prosperity and increasing national power, therefore oil became the main element of national strategies. The author vividly describes the chaos of “gasless Sunday” in the United States, which emphasizes the drama of the problem of lack of oil in the modern state. The expression “oil is power” was constantly confirmed during the First World War. Oil has become a symbol of both power and independence. Yergin shows how oil, as a source of the energy, established links between the goals of oil companies and the interests of the state. This connection became subsequently a permanent component of world politics.

The third part notes the role of oil during the Second World War and the events that preceded it. In this part, Yergin emphasized the role of energy in planning military needs during the war.  For instance, neither Germany nor its allies had significant own sources of oil, which was the main reason for their military defeat. The main economic goal of Germany in the campaign to the east, as during the First World War, was the seizure of the Caucasian oil fields. But the Germans miscalculated their future oil needs, with the result that the implementation of aggressive plans became impossible. Another strong point is how Yergin showed the wise foreign policy of Roosevelt. For instance, Roosevelt believed that oil should be used as an instrument of diplomacy, and not as a trigger for a weapon. The United States has not imposed an embargo against Hitler’s ally Japan for a long time. However, today using an embargo became widely used instrument in the US foreign policy.

The fourth part of the book is entitled “Hydrocarbon Age” and tells about the greatest discoveries of oil fields in the Middle East, the first energy crises, the formation of the Organization of Petroleum Exporting Countries. From the mid-1940s, the center of world oil production began to move from the Caribbean to the Persian Gulf. Together with him, the center of political and economic interests of not only oil companies, but also of Western countries shifted to the Middle East. Even today, the United States considers this region to be its zone of influence and plays an important role in the US foreign policy. At the same time, oil has become the center of growing nationalism. Middle Eastern countries demanded an increase in revenues from oil companies. Oil meant for them the acquisition of power, world influence. Companies were forced to make concessions and give up an increasing part of their revenues to the countries that own oil resources in order to maintain “friendly” regimes in power. The price drop that followed in the late 1950s due to a sharp increase in supply forced the oil-exporting countries to create an organization whose goal was to maintain and lift prices to their previous level. The OPEC restricted the rights of foreign companies and obliged them to coordinate any major changes in production volumes and prices. Nationalism in oil rich countries is still threatening, especially in the Middle East.  No matter how developed international and national policies, in the post-war history, the trend of oil consumption was a constantly upward trend. The fifties and sixties became a trap for importing countries, which carried out a large-scale transition to the use of oil in all sectors of the economy without using resource-saving technologies, and demand in the private sector increased sharply. According to the author, the era of the “hydrocarbon man” is coming. At that time, during the first Iraqi and Suez crises, the first successful tests “oil weapons” were made.

The fifth part of the book is devoted to the process of transforming OPEC from an imperceptible organization into a colossus of the world economy, and the struggle of its members for world domination. The increased economic growth of the early seventies led to the fact that the demand for oil began to exceed supply. It was from this period that negative factors most clearly manifested themselves in decades of growing dependence of European countries on Middle Eastern oil. Since then, oil has become a valuable weapon of the Middle East. They were actively getting rid of their colonial past, and the status of Western oil companies dropped to the level of hired labor. As a result, by the end of the seventies, the global petroleum industry had changed beyond recognition. After the revolution in Iran, oil supplies from this largest exporter ceased, and oil became the subject of the largest speculation, which showed that not only economic growth and the integrity of the global economy, but even the world order were at risk. As a result of the crisis, countries began to create significant reserves of fuel, the transition to other energy sources began, an economic downturn and an increase in inflation rates began. New sources of oil in Mexico and the North Sea weakened OPEC, and by the mid-eighties, prices began to decline. For decades, oil has contributed to the accelerated development of civilization in both positive and negative directions, constantly being at the center of the international economy and politics, being at the same time a reliable source of the welfare and political power of states. This strategically important resource, which nourished the world economy, which without it is unable to function, will remain for many decades the object of interests and actions of companies and states both with economic instruments and with the help of military force, changing the development directions of individual countries, regions and the entire planet.

Even today, when oil has lost its position as the main energy resource, we see that the policy of the United States are directed at that region and are a large component of the current US foreign policy. However, the United States has proven that it can cope without the Middle Eastern oil and leads its internal policy to diversify of energy sources to strengthen its national security.

To conclude, one must read this book because author give a clear and persuasive understanding of the importance of energy for countries and how the energy develops national security and foreign policies.  

Bibliography

  • Yergin, Daniel. The Prize: The Epic Quest for Oil, Money and Power. Ney York: Simon & Schuster, 1991.
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