Bi-Weekly Geopolitical Report – The Oil Weapon Returns (October 2, 2023)
Bill O’Grady | PDF
Oil is arguably the most critical commodity. Although food is perhaps more essential to life, most food production today is dependent on fossil fuels. Daniel Yergin’s epic history of oil, The Prize,[1] examines who had oil, who needed oil, and what they did to secure it. Due to oil’s importance, there has often been a geopolitical element to the commodity. We believe we are seeing yet another episode of oil being used for geopolitical purposes.
In this report, we open the discussion with two examples of using oil supplies for political purposes. Next, we offer a short history of oil in the Middle East. From there, we will examine recent developments. With this background in place, we will then look at how the power of oil affects presidential approval ratings. We will also show how OPEC+, especially the Kingdom of Saudi Arabia (KSA) and Russia, are using oil supplies to further their geopolitical goals. As always, we will conclude with market ramifications.
[1] Yergin, Daniel. (1991). The Prize: The Epic Quest for Oil, Money, and Power. New York, NY: Free Press.