Our World is Dictated by the Need to Control Oil.
Oil is the most essential reservoir of energy on this planet.
The lifeline of industrialized countries, often the antecedent of conflicts. It has induced several economies to slip record low numbers, it has also built glowing sky scrapper in sands and deserts.
The importance of petroleum in the transportation and industrial sector is apprehended by one and all, but what’s startling is the very existence of oil-based products in our everyday objects and that they wouldn’t have existed had it not been for oil.
Every time you blow a bubble gum, you should be grateful to oil deposits on Earth, the chewing gum that we keep swinging in the jaws, now and then includes petroleum. Toothpaste, deodorant, lipsticks, perfumes, contact lenses and even dentures have some petroleum-based product in them.
We are surrounded, in a literal sense, by the objects that need oil for their manufacturing. Tech giants like Amazon, Google and Microsoft have joined the race and are hauling up with the fossil fuel industries with a common aim to extract as much oil and gas as conceivable from the fields.
How did the oil manage to Run Our World?
Our subjection to oil dates back to the earliest known era, remains of ancient civilizations were explored to discover that petroleum-based products were used as means for several essential activities. Mesopotamians used it in Ornaments, the Babylonians used it in the waterproofing of boats, to bind mummies in Egypt and the ancient Greeks used it as fuel for lamps.
The modern oil industry was born in the mid 19th century, with the contributions of Scottish chemist James Young, who noticed a black liquid seeping from the ceiling of a coal mine, this was crude oil which he distilled and made it suitable for an oil lamp, also a thicker oil to lubricate machines in 1848. James Youg is arguably the father of the Petrochemical Industry, further, he partnered with Edward William, a geologist to come up with the world’s first commercial refinery. Drilling sites and oil wells were explored in all continents and refineries were set up with a modern touch of engineering applications.
Oil Dominance of the West and its Solution
Later in the century, the US experienced the rush for Black Gold, America became the largest producer of oil. Then in the 20th century, oil consumption was on an exponential rise, owing to the rise of the automobile industry, reconversion of ship engines and aeronautics growth.
The most crucial period in the oil’s tale came in 1908 when a British company discovered oil in Persia, present-day Iran. This was the first discovery in west Asia and it set a surge of research and removal, it became a checkpoint in their history of colonial rule and the world.
Oil fields in the middle east, Qatar, Saudi Arabia, Kuwait, Iraq, and United Arab Emirates in the 1940s. With each oil field, new companies were set up and were backed by the west hoping to secure authorisations and each seeking to restrict the price. Arab Nations established a body to end the intervention of western nations in the oil business and achieve fair and secure oil prices. They called it the Organisation of the Petroleum Exporting Countries (OPEC) in a founding conference in Baghdad in 1960.
Oil Shocks and the Markets
Over the years more oil-rich nations became members and hence strengthening through unity and dominance made it an extraordinary success. OPEC placed a restraint on the US and its allies who backed Israel in the War that took place in the 1970s. Oil prices quadrupled from $3/Barrel to $12/Barrel, which was the first oil shock.
Mentioning the second oil shock, China holds the culprit label, as it was in 2020 when the world was preparing and fighting the Wuhan Virus, which is reportedly linked with China’s Virology Laboratory at Wuhan. Oil prices reached a record low of -38$ a barrel in April 2020, although other factors were the price war between Russia and Saudi Arabia. Air travels were halted, electricity demands declined, countries were shut down, vehicles were not allowed to move and whatnot, the year 2020 saw a rock bottom drop in oil consumption.
In 2020 oil lost its sheen as Liquid Gold, and now in 2021 some say that the end of oil is near, is it?
Well not really! The oil industry is in an existential crisis, the world is aggressively exploring green alternatives, even adopting a few, but oil will remain a major global energy source for decades to come. The global oil demand is still 92.8 Million barrels a day, nearly 4.8 billion cars are on the roads and just 4.8 million electric vehicles in use.
If 100% of vehicles sold were electric, starting today, it will still take 25 years to replace the entire combustion vehicle fleet.
This means we might not experience an overnight change. Oil is not just used as fuels almost all the industries work on products that cannot be manufactured without crude oil. A long list of products like beds, cameras, computers, cars, detergents, furniture, pesticides, golf balls, plastic wraps, tyres, and even electric vehicles.
You may not need an oil change for EVs but you may still need crude oil-based lubricants, motors and fluids to run them.
The demand for oil will plateau and not decline as claimed by various studies now seems true.
The standalone fact here is, the transportation revolution will transform the oil market and can’t lead to its collapse, hence oil is not disappearing from our lives in a hurry!
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