One area of the world has assumed particular significance for the great powers since 1945: the Middle East. The reason is that it holds about 70% of the world’s known oil reserves.
Oil is the global economy’s most important commodity. Oil is fuel, heat, and light. Without it, capitalism would grind to a halt. Oil is also immensely profitable. Five of the world’s top ten corporations are oil companies.
Post-1945 US economic growth fast outstripped domestic oil production. In the 1950s, the US imported only 10% of its oil. By the late 1980s, this had risen to more than half.
At the same time, newly industrialising countries like China and India are putting growing pressure on oil supplies. With annual growth rates of around 8%, China’s share of global output has risen from about 5% in 1978 to about 20% today.
But oil is running out. Systematic lying by states and corporations makes accuracy impossible, but there is little doubt that we are now close to ‘peak oil’ – the point at which depletion of the world’s reserves causes total output to begin to fall and prices to soar.
Oil is the principal reason the Middle East has been a battleground for a century.