Wednesday, November 7, 2007

Oil: Compulsion and Defiance

It is widely recognized that China and India have the potential to develop into economic superpowers in the 21st century. A key component of their growth is oil, which both nations are compelled to import.

This compulsion is not without its geopolitical costs, especially with oil prices at record highs. Iran and Venezuela, for example, can continue to enjoy more protection from outside political pressure as their oil revenues increase and non-oil producing nations find it necessary to come to terms with them.

In Russia, the lower house of Parliament voted unanimously in early November to suspend the country's participation in the Conventional Forces in Europe Treaty. This is yet another of Putin’s shows of defiance to the west. The higher demand for oil will lead to increased reliance by consuming countries like the U.S. and European allies on imports of oil and gas from the Middle East and Russia.

1 comment:

arclightzero said...

That is a very interesting take on things. I had been studying the political aspects of Russia pulling out of the arms treaty, but I hadn't put the pieces together between the geopolitical tensions and oil aspect.

Thanks for enlightening me on this. I'll have to give it some thought and perhaps post on it later.