Commodities in the 20th Century - Essay Example

Commodities In his book, The Prize: The Epic Quest for Oil, Money, and Power, Daniel Yergin has demonstrated how oilplayed crucial geo-strategic, social, political and economic roles in the 20th century. The book also illustrates how oil was the most significant among the non-human resources that drove the 20th century economy among nations, as well as organizations, considered to be industrial powers. Although the book is set on a historical theme, one aspect that it highlights is the role played by oil in arriving at some geopolitical decisions that led to near-global disasters. Oil has been shown to have moved from a hand-dug commodity used to light kerosene lamps to a multi-billion dollar product. With its technologically advanced extraction and mass processing having only peaked within the last century, it has rapidly grown to become one of the most sought-after commodities in the trading world, shaping modern political structures (Yergin 344). In view of this, this paper will research the role oil has had towards war, especially WWI, WWII and modern warfare. To lay emphasis on the contributions of the commodity to war and disaster, the paper will also highlight how oil, or the lack of it, led to the defeat of some empires. The immeasurable significance accorded to oil, in all the forms it occurs, by political empires can be traced to as early as the first decade of the 20th century when governments started showing interest in private oil companies. On behalf of the British government, Winston Churchill proposed a bill to the House of Commons in 1914 that sought to acquire a 51% controlling stake in the Anglo-Persian oil company at a cost of ?2.2 million (Yergin 161). A hidden motive can be seen in this move because the acquisition agreement further stated that the government would install two directors in the company that would have no hand in commercial activities. Rather, their only role would be to sanction political matters and those relating to Admiralty oil contracts. Fuel oil prices were already rising occasioned by the rising need of an industry that relied on oil-powered propulsion. It was the view of some members of the House of Commons that the cause of the price increase was a new special use found for oil, and not some rings or trusts, which was also contributing to its shortage (Yergin 162). From the notion of a new and special use being discussed in the House, one can easily link oil to politics. It was soon established that the “use” was in the form of other countries stocking up on fleets of oil tankers in case of war. From history, we learn that Britain had an abundance of coal at the beginning of the 20th century, but no oil reserves had been discovered within it by that time. It then becomes apparent that the decision to acquire private oil companies was informed by the technological advancements of the Anglo-German maritime prowess. Only oil, and not coal, could provide the edge crucially required in terms of resilience and speed to assist the British maintain the naval supremacy that the Germans were so relentlessly working towards. Here, it can be seen how oil had become a key strategic commodity in national policy. While the Anglo-Persian deal assured the firm a variety of secure markets and capital, it, more significantly, provided a steady oil supply to the British government and guaranteed its survival, albeit only for a foreseeable future. This is further confirmed by Churchill’s revelation that the acquisition’s objective was to keep the navy prepared. A critical examination of that objective brings to light the fact that the precedence of investing oil in national security over a flourishing market was legitimized just before WWI. This is even strengthened by the way advocates of national security within the British government supported the limiting of oil in the market. Moving toward WWII, it is apparent that it was an affair between industrial powers. Therefore, nations that had no oil were greatly disadvantaged. For instance, Russia, the United States and England had abundant supplies of oil and a crucial strategy was to protect their supplies adequately. On the other hand, Japan and Germany got into the war without their own oil resources and spent a considerable duration of it attempting to seize regions that could provide steady supplies, further emphasizing the commodity’s significance. The weight of this observation is in the manner in which the southern strategy of Japan was to seize the Dutch oil fields to supplement its own deficit which could only last one year into the war. Similarly, Germany’s dependence on oil and its products to operate its war equipment had already been observed. Germany was keenly focusing on the Romanian oil wells in Ploesti while simultaneously attempting to capture the Baki oil wells in Russia. Here, the role of oil cannot be understated, given the fact that the British government collaborated with their French counterparts to offer Romania a $60 million compensation to destroy its oil wells rather than granting Germany access to them (Yergin 370). Whether the objective of this move was to facilitate a British attack on Germany or ultimately drive Germany into an inevitable surrender bears less significance than the presence, or absence, of oil in the strategy. In the meantime, without a price agreement, German got access to the Romanian oil wells. At the same time, Britain’s oil supplies were declining, and true to Churchill’s previous idea, fuel oil was rationed among domestic motorist and prioritized in the war. Even the Allied Forces, led by the British Royal Air Force and the United States Air Force, strategized their bombings in WWII to target natural oil refineries and synthetic oil storage depots and producing plants. The United States Air Force also individually bombed the Romanian oil wells and refineries in daytime attacks. Their realization of the role and significance of oil in the war is seen in their emphasis against indiscriminate action, but instead deciding that all action priority should be towards oil and transport plants. So important was oil to the German offensive that the Allied Forces realized that if they destroyed only 17 out of all the combined targeted oil wells, they would incapacitate Germany by not less than 80%. This is what came to be known as the Oil Campaign of WWII (Yeomans 75). Indeed, even after the apparent success of the Allied Forces, they had not interrupted the significant production of oil that still reached Germany. However, the immediately effective Oil Campaign was able to cut off supplies to Germany’s armament production units, giving decisive results within a year that saw its collapse. Although the book was written before the Iraq and United States attacks on Kuwait and Libya respectively, and also the United States attack on Iraq, the political structures and concepts described in it can be linked to them. It cannot be denied that the United States’ most significant contribution to WWII was its seven billion barrels of oil, without which the war could have ended in any other way. Applying the same line of thought to the United State’s recent attack on Libya, it is difficult to eliminate the possibility of an oil link. This can be supported by the fact that Libya’s oil reserves, at 3.5% of the total global reserves, slightly double those of the United States (Yeomans 72). Even with modern exploration technologies such as horizontal drilling and hydraulic fracturing, the United States and other oil producers are consciously aware of the finite nature of the earth’s oil supply. Synonymously to Churchill’s acquisition of the Anglo-Persian oil company, the United States’ invasion of both Libya and Iraq, and indeed Iraq on Kuwait, even on a humanitarian mandate, would serve a similar purpose; to take control of the oil reserves so as to destabilize national possession and privatize the industry. Analyzing the privatization gives it a deeper meaning; that of transferring ownership and control to foreign bodies. It makes sense to assume that the foreign bodies were predetermined before the attacks, meaning that control literally remains in the hands of the United States. Thus, if oil drives current global economies, then war serves business well, just as the same oil finances war. In conclusion, just before invading and occupying Iraq, the United States’ president had termed it (Iraq) as a destabilizing barrier to the manner in which international oil markets accessed the commodity. Viewing such a risk as unacceptable to the United States, military intervention was declared an unavoidable necessity. In the build-up to that attack, similar to that of Egypt, a critical analysis would point at Anglo-American oil companies, United States and European Union weapon manufactures as well as Wall Street as the unspoken but apparent beneficiaries. The aggressive interest in oil-rich countries can only be associated with most nations’, and particularly the United States’, awareness of the capacity oil can grant them during the war and reconstruction periods thereafter. The United States is not short of its own oil reserves, therefore seeking control over external resources can only be viewed as a political strategy rather than a move to supplement what it has (Yeomans 69). Works Cited Yeomans, Matthew. Oil: Anatomy of an Industry. New York: New Press, 2008. Print. Yergin, Daniel. The Prize: The Epic Quest for Oil, Money, and Power. New York: Simon & Schuster, 1991. Print. Read More