The International Oil Industry: Recent Changes and their Implications for Mexico

Abstract

A number of interrelated changes in the five years since the Cold War ended have had a negative impact on Third World oil producers. First, the continuing stagnation of the world economy and the shift toward other energy sources have slowed the growth in demand for oil products. Second, the Communist bloc, which once offered material support for Third World countries trying to develop their own oil resources, has collapsed. Third, this collapse has accelerated a trend toward privatization in the oil industry, as state ownership has been labelled a failure and private ownership touted as the only way forward. The result of all these factors has been that Third World countries, including those of the former Communist bloc, have been opened up to the international oil companies on a scale not seen since the 1950s, and on terms which are a throwback to that era of oil company dominance. In short, the balance of power between these companies and the Third World countries has shifted sharply to the companies. How and why this shift has taken place and its implications for Mexico are the subject of this article. This article can also be found at the Monthly Review website , where most recent articles are published in full. Click here to purchase a PDF version of this article at the Monthly Review website.