Projections for the geopolitical economy of oil after war in Iraq

Abstract

How are events surrounding the latest Iraq war shaping the future global political economy of oil? The saliency of Iraq's oil resources suggests a trend towards intensified great-power competition to dominate energy-rich provinces and transportation corridors. Yet, the nature of the oil trade, Iraq's insurrection, and Sino-American economic interdependence indicate barriers to unilateral attempts to control energy supplies. Based on examination of the Iraq conflict's unintended stimulus to terrorism and to China's search for foreign oil supplies, this paper assesses three possible scenarios: ‘multiple energy insecurity’ (great-power competition and violent non-state reaction); ‘mutual energy securitisation’ (inter-state collusion against non-state resource claimants); and ‘multiple energy security’ (great-power curtailment of geographically expansive energy consumption). It finds that the increasing problems associated with the first two alternatives are inducing decision-makers to contemplate policy options consistent with the third scenario.