The Genie Out of the Bottle: World Oil Since 1970
By M. A. Adelman
A well-known MIT specialist in oil economics, who published a book on the world petroleum market in 1972, offers a jaundiced view of U.S. policy toward OPEC over the past quarter-century. Adelman’s most fundamental and least understood thesis is that oil is not an ‘exhaustible’ resource in the sense that term is conventionally understood. The world will not ‘run out’ of oil; rather, its price may rise to a level that will sharply reduce demand. What makes oil special is that most of the lowest-cost reserves are under political control by states that prevent competitive exploitation, which introduces instability into the oil market. He notes that OPEC members do not accept a competitive price, which would be much lower than the current price, but they do not control enough of the market or have enough cohesion to assure a higher monopolistic price. This analytical framework informs a running account, much drawn from the contemporary press, of relations between OPEC members, international oil firms, and politicians in both oil-exporting and oil-importing nations. The book is noteworthy for its attempt to quantify the costs of oil extraction in various times and places. It will have too much historical detail for some readers and suggest too much anti-Arab animus for others, but it is well-informed and analytically potent.