I often hear that various countries are vying for “strategic control of oil.” For example China in Sudan or the US in the middle east. But isn’t oil traded on the world market? Why would the origin of the company that pumps and refines the oil matter, as long as it gets to the world market?
Oil stocks, futures, etc. are trades of oil which has already been pumped and sold by the originating company (or state).
It’s that firsst sale that matters; if I were, say, Brazil (and let’s assume that Brazil is the major supplier of oil to the West for sake of the example), and didn’t want to sell my oil to the US, I could choose not to. The US would then have to source its oil elsewhere, at a (possibly much) higher cost.
That’s what OPEC did to cause the '73 oil crisis, along with cutting production to artificially inflate prices.
Because in dire situations (a la WWII, or Saddam’s Iraq), there can be embargoes against nations. Ask Japan if they wish they had had strategic control of oil supplies in 1941.
The strategic control isn’t for now. It’s for later, when things get f—ed up. T
hat, plus cronyism among people’s buddies in various oil entities (who might not get a piece of that oil trade if the oil is nationalized, etc.).
Thanks for the answers. I am still looking for a more in depth and comprehensive explanation of the whole oil process and what is involved with “controlling” it as a foreign country.
I, as the political power in charge of Tristania, feel a need to secure some strategic control of oil, as necessary for myself. My neighboring country, By-Toria, has oil fields.
I will invade and conquer By-Toria, thereby making the oil fields mine.
Or I can arrange for a coup to overthrow the nation and install a government that is favorable or even a puppet, to my own government.
Either way, the oil reserves in By-Toria are now in essence mine. I can make sure all the oil that comes out of those fields only comes to me, and not anyone else, therefore I have a ready supply of oil.
Get it?