Oil in the New World Order Edited by Kate Gillespie and Clement M. Henry. University Press of Florida, 1995.

Abstract

This readable and informative book discusses recent and expected future
developments in the oil industry. It is a compendium of ten articles by academics
and industry experts.
In the introduction, the editors argue that the international oil industry is a
peculiarly volatile industry. Oil prices are very sensitive to crises in the Middle
East, where two-thirds of the world's oil reserves are located, where half of the
internationally traded oil is produced, and where the cost of production is the
lowest in the world. They maintain that, due to the inherent inelasticity of both
demand and supply of crude oil and high price volatility, markets have never
worked for oil industry efficiently. Consequently, there has always been some
son of market order. The editors provide a survey of the different orders that
prevailed in the past, such as John D. Rockefeller's monopoly through the
Standard Oil Trust, the dominance of the vertically integrated Seven Sisters, and OPEC. The current oil order, according to the authors, is the Saudi-American
regime, which emerged after the Jraqi invasion of Kuwait and the subsequent
Desert Storm. This regime, which combines huge Saudi oil production capacity
with American military might, has replad OPEC. The editors do not expect it
to last long, because the new world order following the collapse of the Soviet
Union may give rise to a new oil regime independent of the Saudi-American
regime: the Commonwealth of Independent States has a potential of huge oil
reserves that can be produced at a low cost ...