The Impact of Oil on International Relations (With Outline)

The Impact of Oil on International Relations

The Impact of Oil on International Relations (With Outline)

Outline:

• Introduction 
• Essential means of economic development 
• Augmented output of oil over the forty years 
• Price hike affects the whole world 
• It’s a justified political weapon 
• Gulf states and Middle East, the largest producers of oil 
• Oil and developing countries like Pakistan 
• Conclusion 

It goes without saying that oil has come to play a huge role concerning the economic development of advanced countries as well as the under-developed countries. The world’s oil industry is the world’s leading industry in size and is perhaps the only international industry which concerns every country in the world. The output of oil has steadily enhanced over the last forty years and the older form of energy sources like coal and wood.

Apart from economic interests, the shift in the oil policy of Arab nations has also been dictated by political compulsions. Aware of the reliance of US on oil outputs from the Middle East, the Arab oil production nations used oil as a means of bringing pressure to bear on USA to discontinue its pro-Israeli policy. They announced a complete embargo on all oil sales to the USA and other countries which were willingly helping Israel in its battle against Arab Nation. So oil became a successful economic and political weapon in the struggle and continues to be so today. The Arab countries are biggest oil producing and oil exporting countries in the world. USA, Europe and many other Asian countries are dependent on Arabia, Libya, Iraq and the Gulf states for the supply of oil. In the wake of world war II, the oil producing countries have become more and more aware of their basic national interests and tailored the production and prices of oil to suit their own purpose. This state of mind lead to the formation of OPEC (Organization of Petroleum Exporting Countries) which works in unison to fix the price of crude oil.

After World War II, oil has cast a huge impact on international relations and the economic development of the world. At the purely political level the inter-relationship of oil and the changing fortunes of the Middle East have made headlines on many occasion. The closure of the Suez Canal after the war of 1956 and the six day war of 1967 had a stunning effect on the movement of oil. The ban on shipping oil to USA and Europe had several serious consciences. It gave rise to increased oil prices to enable the companies to cover their increase costs. Consumer countries felt the pinch and some exerted intense diplomatic pressure to restrain Arab nations from using oil as a political weapon.

Very recently the price-hike of oil has cast lightly negative impact on the economy of the developing countries like Pakistan. Just a few months ago, the price of oil was seventy dollar per barrel. Gradually, its prices went on increase and at present it is one hundred and thirty dollar per barrel. This price hike has really made economy of the developing countries shaky and deplorable. The economy of Pakistan has also been badly influenced by price hike. It has cast adverse effects on the living standard of the people. It has made the basic needs of daily use out of the reach of the poor people. The poor are forced to commit suicide along with their children and this is very tragic situation Pakistan is facing today.

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Apart from highly industrialized states, developing countries are too depended on oil. They are accruing at rapid economic development and face the need to increase their oil supplies in the absence of alternative energy resources. Compared to top industrialized countries, the per capita use of energy in Pakistan is fairly low.

In Pakistan, with growing emphasis on urbanization and the establishment of industries to make are of the country’s resources, it is evident that the demand for fuel and power has begun to rise swiftly. The presence of natural gas and reservoirs of oil in Balochistan are a good omen, but only the time will tell if they are large enough to offset our wholesale dependence on foreign supply. The future of oil will continue to be conditioned by the political and economic interests of oil production and oil consuming countries. The current Iraq situation, the impeding threats of war at Iran, the rash policies of Israel and the question of the Palestinian refugees need to be solved urgently to avoid the further price hike of oil and its gruesome impact on developing countries.