Last year’s international coordination by the West to address the natural gas issue proved that with little effort and international coordination between Western allies, the price of a commodity can be tamped down. Natural gas is a common commodity that can be extracted in many different places and the world has plenty of it. The price of gas will depend on the efficiency by which it is extracted and delivered to the consumer and an international effort where supply chains are coordinated can increase this efficiency exponentially. This is why the West could crush the gas war of last year and violently bring back down the gas price.
Russia and Saudi Arabia are currently coordinating oil production cuts so as to push up the price of oil. We suffer as a consequence of these production cuts, so why do we tolerate this?
The West is turning its back on oil production due to serious climate change concerns, and although climate change is a very serious and existential threat, we also need to be pragmatic. Oil is not going away and its demand will only keep increasing as developing nations demand more cheap energy – it’s not going to come from wind farms or solar panels, but from oil and gas. The reality is that oil will be burnt to produce energy and the West can’t stop this. What the West can do is to strategically unite by taking over the oil market and through its dominance in the oil market promote clean oil-energy conversion solutions. If the West doesn’t control the oil market for idealistic reasons (which are in principle correct), more damage will be done as the oil and oil-energy industries across the world will be left unchecked. Policy-makers in the West still don’t get this.
The West can control oil markets by massively increasing production and dump product constantly in the markets. It’s remarkable to me how ever since the 1970s the West has still allowed free reign of the oil market to a gang of semi-literate murderous dictators (OPEC). Donald Trump had one geopolitical victory to his name among all the disasters he had inflicted – it wasn’t China. Chinese exports to the US actually increased under Trump. What Trump managed to do was to raise oil production significantly in the US to the extent of turning it into the world’s major oil exporter, all the while suppressing the price of oil. He probably did this with no environmental concerns whatsoever, but there are plenty of ways in which oil extraction and energy production can be made much cleaner.
Last year, President Joe Biden traded the oil petroleum reserves to fight off the price of oil, and he did so even profitably, selling the reserves at the highs and buying at the lows. US oil production is also at its peak, so clearly more oil reserves need to be tapped and new oil extraction projects need to be kicked off, unless, of course, we would like OPEC to keep playing with our lives and pushing inflation upward by their overarching influence on the price of oil.
Even if the West doesn’t use oil for its energy production, which is unlikely in the years to come, the price of oil would still affect our economies in terms of its inflationary effect. The price of oil influences the production costs of many things we use in our lives including food itself. As many poor economies struggle to develop, more oil will be burnt and its demand will only increase. If the West ignores the oil industry it will do so to its own detriment. Western leaders are in a very good position to come up with international oil plans. The general public is not sympathetic to oil companies and this gives governments a lot of leverage with them. Western governments have basically, carte blanche for their action in oil markets – they should use it.