Globalization of Petroleum

The Globalization of Petroleum/Oil: A Short Timeline of How Oil Became the World’s Nervous System

Few resources have shaped the international system as profoundly as oil. Its story is the story of globalization: empires rising, borders redrawn, companies becoming more powerful than states, and entire regions woven into the world economy.

Here’s a concise timeline capturing how oil went from a local curiosity to a global force.

1850s–1900: The Birth of the Oil Age

• 1859: Edwin Drake drills the first commercial well in Pennsylvania.
• Oil becomes essential for kerosene, lighting, and early industry.
• Russia, the U.S., and the Ottoman Empire begin extracting at scale.

Globalization step 1: For the first time, energy becomes a tradable commodity, and early oil markets emerge.

1900–1945: Oil Becomes Strategic

• 1908: Major discovery in Persia (Iran) → British control solidifies.
• 1912–1930s: Rising U.S. dominance; Rockefeller’s Standard Oil reshapes corporate geopolitics.
• WWI & WWII: Oil becomes a decisive strategic resource for militaries.
• Colonial powers target Middle Eastern reserves with deliberate precision.

Globalization step 2: Oil becomes inseparable from global power and war strategy.

1945–1973: The Middle Eastern Era

• Post-war demand explodes; U.S. oil companies dominate the region.
• 1950s–60s: Saudi Arabia, Kuwait, Iraq, Iran, and Venezuela nationalize parts of their industries.
• 1960: OPEC is founded to coordinate production and resist Western control.

Globalization step 3: Oil creates new power centers among developing states.

1973–1990: Oil Shocks & Energy Interdependence

• 1973 Arab Oil Embargo: Prices quadruple; the West experiences its first major energy crisis.
• 1979 Iranian Revolution: Second shock.
• Japan, Europe, and the U.S. invest in efficiency, nuclear power, and strategic reserves.

Globalization step 4: Oil shows its systemic leverage — a single producer decision can shake global markets.

1990–2010: Liberalization & the Rise of Petro-States

• 1990s: Markets deregulate; oil futures and financialization emerge.
• Russia re-enters the global market; Norway stabilizes as a model petro-state.
• China becomes the world’s largest importer; the U.S. becomes dependent on Middle Eastern security.

Globalization step 5: Oil becomes the world’s most traded commodity, fully intertwined with finance.

2010–2025: Shale, Climate Politics, and Multipolar Chaos

• U.S. Shale Revolution: America becomes a top producer, changing global balance.
• Saudi Arabia + Russia weaponize prices in production wars.
• Renewable energy threatens the long-term oil model.
• Oil remains central to:
  • conflict (Middle East, Ukraine)
  • sanctions (Iran, Russia, Venezuela)
  • geopolitics of shipping lanes (Red Sea, Hormuz)

Globalization step 6: Oil is still the nervous system of our economy, even as the energy transition accelerates.

Why It Still Matters Today:

Petroleum/oil globalized through:

• infrastructure (pipelines, shipping routes)
• finance
• security alliances
• colonial legacies and national sovereignty
• climate politics

Even in a decarbonizing world, oil continues shaping diplomacy, conflict, development, and the future of the global economy.