THE PETROLEUM CULTURE
145
Prices peaked during the 1995 to 2000 period, and supply began
to swell when Iraq re-entered the market under the UN-sanctioned
Food-for-Oil program, which drove prices down. OPEC adjusted
by trying to match cheating with increased production, and oil
prices plummeted to pre-embargo levels due to anticipated Asian
consumption, which never materialized because of the economic
crisis there. Between 1999 and 2000, cuts by the OPEC members
and increased demand, due to cold weather and resupply of low
stocks, increased the price of oil.
Recession in the US contributed to price declines in 2000, and the
September 11th attacks of 2001 pushed them even further down.
In 2002, with Venezuela in turmoil, prices went even lower, causing
companies to immediately stockpile for seasonal and financial reasons. By winter of 2003, prices had rebounded due to cold weather
and renewed talk of hostilities with Iraq. Profits for companies
were at an all-time high as stocks were sold in preparation for the
coming war with Iraq.
The reintroduction of Iraq as an oil producer may have profound
effects in global oil prices, but the prospects for Iraqi face political
impediments (Shafiq, 2009a, 2009b). There are no giant oil fields
being discovered and all of the previous economic issues have
forced the petroleum industry to streamline the distribution process to soften the blow of supply interruptions. However, expansion
of global demand for crude oil is expected to increase from 80 to
85 million barrels per day to approximately 120 million barrels per
day by 2020. Therefore, cooperation is vital to avoid disruption and
the ensuing economic hardship. Furthermore, the world will not be
replacing crude oil as the primary energy source any time soon, no
matter how much energy is projected to come from alternate sources.
In summary, this invokes the concept of geopolitics or the politics of oil: a friend today could be an enemy tomorrow.
5.3 The Seven Sisters
In the past, there have been frequent references to a group of oil
companies generally referred to as the seven sisters, from a phrase
first made popular by Italian oil tycoon Enrico Mattei: Exxon (Esso),
Shell, BP, Gulf, Texaco, Mobil, and Chevron (Socal) (Sampson, 1975).
The rise of the seven sisters can be attributed to happenstance starting in 1904 when Calouste Gulbenkian, an Armenian
145
Prices peaked during the 1995 to 2000 period, and supply began
to swell when Iraq re-entered the market under the UN-sanctioned
Food-for-Oil program, which drove prices down. OPEC adjusted
by trying to match cheating with increased production, and oil
prices plummeted to pre-embargo levels due to anticipated Asian
consumption, which never materialized because of the economic
crisis there. Between 1999 and 2000, cuts by the OPEC members
and increased demand, due to cold weather and resupply of low
stocks, increased the price of oil.
Recession in the US contributed to price declines in 2000, and the
September 11th attacks of 2001 pushed them even further down.
In 2002, with Venezuela in turmoil, prices went even lower, causing
companies to immediately stockpile for seasonal and financial reasons. By winter of 2003, prices had rebounded due to cold weather
and renewed talk of hostilities with Iraq. Profits for companies
were at an all-time high as stocks were sold in preparation for the
coming war with Iraq.
The reintroduction of Iraq as an oil producer may have profound
effects in global oil prices, but the prospects for Iraqi face political
impediments (Shafiq, 2009a, 2009b). There are no giant oil fields
being discovered and all of the previous economic issues have
forced the petroleum industry to streamline the distribution process to soften the blow of supply interruptions. However, expansion
of global demand for crude oil is expected to increase from 80 to
85 million barrels per day to approximately 120 million barrels per
day by 2020. Therefore, cooperation is vital to avoid disruption and
the ensuing economic hardship. Furthermore, the world will not be
replacing crude oil as the primary energy source any time soon, no
matter how much energy is projected to come from alternate sources.
In summary, this invokes the concept of geopolitics or the politics of oil: a friend today could be an enemy tomorrow.
5.3 The Seven Sisters
In the past, there have been frequent references to a group of oil
companies generally referred to as the seven sisters, from a phrase
first made popular by Italian oil tycoon Enrico Mattei: Exxon (Esso),
Shell, BP, Gulf, Texaco, Mobil, and Chevron (Socal) (Sampson, 1975).
The rise of the seven sisters can be attributed to happenstance starting in 1904 when Calouste Gulbenkian, an Armenian