The History of Energy - Part 2

1) Mayor Players and The Role of the SPR

2) Nuclear Energy

3) Key Geopolitical Trends In The Energy Markets

4) Energy Crises of the Past

5) Concluding Remarks

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Mayor Players and The Role of the SPR

Only two parties have enough influence to attempt to control oil prices. The United States and OPEC. OPEC stands for the Organisation of the Petroleum Exporting Countries. It was founded in 1960 by Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela. I know this because it came up on the pub quiz a few months ago and my answer was rather bad. So now I’ll never forget it! OPEC now contains 13 members and is responsible for 36% of oil production as of 2021, and 73% of oil reserves as of 2016. So the oil market is often described in terms of OPEC and non-OPEC characteristics.

Members of OPEC:

- Algeria

- Angola

- Republic of the Congo

- Equatorial Guinea

- Gabon

- Iran

- Iraq

- Kuwait

- Libya

- Nigeria

- Saudi Arabia

- United Arab Emirates

- Venezuela

The aim of the group of large oil exporters is to provide stability in the oil markets. However, as these countries often make most of their money from oil exports, this incentivizes them to aim for higher oil prices. When the United States release large amounts of oil from their strategic petroleum reserve (SPR) in an attempt to increase supply in the market and hence lower prices, the two parties are at odds with where they want oil prices to go. The US also has political elections to consider. With US internal politics at some of the most intense levels ever seen, maintaining power becomes a priority for whichever party is in charge. One way to appeal to the American public is lower gasoline prices. This comes with lower oil prices.

The idea of a strategic reserve is that it can be used in emergencies, for energy security, supply continuity, or for market stabilization purposes. It gives you leeway to be strategic. By emptying it, the United States is shooting itself in the foot at a time when war has returned to Europe and geopolitical tensions are the highest seen in decades.