What to Read on Oil

The global economy runs on oil. Sea, air, and land transportation (of both goods and people) and the manufacture of a vast array of products, from plastic and paint to textiles and flooring, all depend on petroleum. This quintessential product of modernization and globalization, however, constitutes one of the greatest exceptions to the rules by which the globalized world is generally governed. The governments of advanced industrial democracies have relinquished the use of oil as an instrument of foreign and industrial policy, dismantling their state-owned oil companies and allowing oil and oil products to be priced freely in open markets. But elsewhere, particularly among members of OPEC (the Organization of Petroleum Exporting Countries), governments take an opposite tack. In much of the world, in other words, oil is part of positive-sum economic operations. Yet in the countries with most of the world's oil, it is part of a zero-sum game of power, in which relative gains trump absolute ones and economics is often subordinated to politics.

The Prize: The Epic Quest for Oil, Money, and Power. By Daniel Yergin. Simon & Schuster, 1991.
Purchase at B&N.com | Purchase at Amazon.com
The End of Oil: On the Edge of a Perilous New World. By Paul Roberts. Houghton Mifflin, 2004.
Purchase at B&N.com | Purchase at Amazon.com

Daniel Yergin's classic remains the most important introduction to the interplay of entrepreneurial drive, corporate strategy, domestic politics, and geopolitics that has made oil central to world history from the late nineteenth century onward. Yergin paints powerful portraits of individuals and their roles in corporate and political events, putting in perspective the endless competitions for resources, the structural factors that lead to cooperation and often collusion, and the tension between market and political forces that continues to characterize this sector. Paul Roberts picks up where Yergin leaves off, tracking not the oil industry's growth and maturation but its twilight. Roberts deals with the BRIC newcomers, especially China and Russia. In these countries, the boundaries and relations between the public and private sectors are in flux, sometimes tilting toward the positive-sum world and sometimes to the zero-sum world. The book treats the debate over so-called peak oil fairly and examines the difficulties companies, countries, and the earth itself confront in dealing with climate change.

Oil 101. By Morgan Downey. Wooden Table Press, 2009.

Purchase at B&N.com | Purchase at Amazon.com
Petromania: Black Gold, Paper Barrels, and Oil Price Bubbles. By Daniel O'Sullivan. Harriman House, 2009.
Purchase at B&N.com | Purchase at Amazon.com
Oil, Dollars, Debt, and Crises: The Global Curse of Black Gold. By Mahmoud A. El-Gamal and Amy Myers Jaffe. Cambridge University Press, 2009.
Purchase at B&N.com | Purchase at Amazon.com

The growth of oil as a financial investment instrument has heightened the contradiction between oil's globalized role and the neomercantilist policies of some key actors. As with other commodities, this process operates through trades of futures contracts and options. In recent years -- particularly as crude oil neared $150 a barrel in mid-2008 -- the role of speculators in price formation has become a focus of academic dispute and political concern. Morgan Downey's Oil 101 is a primer on oil as both a physical commodity and a financial instrument. Daniel O'Sullivan's book explores whether the recent explosion of oil prices was driven by the actual tightening of oil supplies or by exaggerated expectations and fears. As the title suggests, he favors the latter interpretation but does a good job portraying the debate as it unfolded in 2007-8 and outlining how it might re-emerge in the future. Mahmoud El-Gamal and Amy Jaffe cover similar territory but take a longer-term view, placing the most recent economic recession in perspective. They also address the uses of oil revenues by sovereign wealth funds and governments seeking to enhance their power.

Hubbert's Peak: The Impending World Oil Shortage. By Kenneth S. Deffeyes. Princeton University Press, 2001.
Purchase at B&N.com | Purchase at Amazon.com
Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. By Matthew R. Simmons. John Wiley, 2005. 
Purchase at B&N.com | Purchase at Amazon.com
The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warming. By Robin M. Mills. Praeger Publishers, 2008.
Purchase at Amazon.com

A debate is currently raging among geologists and economists over whether global oil production has peaked. One school of thought, buttressed by mathematical models and some empirical evidence, argues that the peak production of conventional oil occurred sometime over the last two decades. Kenneth Deffeyes' treatise is the classic statement of this position, and Matthew Simmons' application of the argument to recent Saudi production has attracted much attention. Contrarians argue that the peak-oil theorists may be right -- eventually -- but that the relative lack of new oil discoveries owes far more to underinvestment and geopolitics than to geology. Technological breakthroughs in extracting hydrocarbon from shale and deep water, they note, may be pushing out the time when peak oil might hit. Robin Mills offers a solid version of the contrarian case.

Inside the Kingdom: Kings, Clerics, Modernists, Terrorists, and the Struggle for Saudi Arabia.  By Robert Lacey. Penguin, 2009.
Purchase at B&N.com | Purchase at Amazon.com
Thicker Than Oil: America's Uneasy Partnership With Saudi Arabia. By Rachel Bronson. Oxford University Press for the Council on Foreign Relations, 2006.
Purchase at B&N.com | Purchase at Amazon.com
Oil Monarchies: Domestic and Security Challenges in the Arab Gulf States. By F. Gregory Gause III. Council on Foreign Relations, 1994.
Purchase at Amazon.com

In the geopolitics of oil, four countries matter: Saudi Arabia, the United States, Russia, and China. Among the four, the Saudi position is unique, due to Riyadh's historical policy of maintaining surplus production capacity in order to wield global influence. A country with a GNP the size of New Jersey's has thus gained a powerful position on the global stage. Robert Lacey's book, an update of his 1981 classic The Kingdom, serves as a good introduction to this crucial player. Rachel Bronson's historical analysis puts the U.S.-Saudi relationship in context. And Gregory Gause's Oil Monarchies explores the domestic and regional factors that shape the international policies of the Gulf producers. Together, the three provide critical insights into how the U.S.-Saudi relationship has influenced global oil prices.


Petrostate: Putin, Power, and the New Russia. By Marshall I. Goldman. Oxford University Press, 2008.

Purchase at B&N.com
| Purchase at Amazon.com
The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea
. By Steve LeVine. Random House, 2007.

Purchase at B&N.com
| Purchase at Amazon.com
Russia and the Caspian States in the Global Energy Balance
Read

Even more than Saudi Arabia, Russia is the most important hydrocarbon producer in the world, and in the post-Soviet era, control over oil and natural gas has been the key to power for Russian officials. Marshall Goldman understands the role oil and natural gas played as the cement of the Soviet empire, and in Petrostate, he brings his insights into the contemporary era. Steve LeVine focuses on the "near abroad," especially the Caspian region, where Soviet resources devolved to successor states and where Moscow has tried to reestablish control over flows of hydrocarbon exports. His book offers a wonderful combination of concrete history and abstract generalization about the sources of power today. Anyone interested in Russian and Caspian oil-related issues should also consult the excellent works on the region sponsored by Rice University's James A. Baker III Institute for Public Policy, which can be found on the Web page of the institute's Energy Forum.

The Vital Triangle: China, the United States, and the Middle East. By Jon B. Alterman and John W. Garver. Center for Strategic and International Studies, 2008.
Purchase at B&N.com | Purchase at Amazon.com
China's International Petroleum Policy. By Bo Kong. Praeger Publishers, 2009.
Purchase at B&N.com | Purchase at Amazon.com

China looms exceedingly large in today's global petroleum sector, and its acquisitions and capital expenditures change so fast that it is hard stay up to date on them. Jon Alterman and John Garver provide an insightful reading of the interplay of China, the United States, and key Middle Eastern producers. But for understanding the inner workings of decision-making in China, nothing can substitute for Bo Kong's new study, which shows just how deeply rooted foreign and energy policies are in the country's domestic arena.

The Big Rich: The Rise and Fall of the Greatest Texas Oil Fortunes. By Bryan Burrough. Penguin, 2009.
Purchase at B&N.com | Purchase at Amazon.com

There is no definitive portrait of U.S. energy policy, let alone U.S. oil policy, and some of the best studies of the sector are novels, such as Upton Sinclair's Oil! (1927), or light journalism, such as Lisa Margonelli's Oil on the Brain: Adventures From the Pump to the Pipeline (2007). Bryan Burrough's The Big Rich is a wonderful compromise, a nonfictional account of the great entrepreneurs who developed the American oil industry. Historians might cringe from time to time, but it is the best read available on the rudiments of the country's oil and gas industry and its impact on government policy.

Latest Commentary & News analysis