‘Peak oil’ theory: Keeping the oil flowing

Concerns about energy supplies have dominated newspaper headlines since the Russian-Ukrainian gas crisis of 2005. Yet are these concerns legitimate?

The inter-relationship of consumer and producer states is a longstanding phenomenon, which historically overcame major obstacles, such as the East-West confrontation during the Cold War. For many observers, energy security — or insecurity — epitomises the perceived readiness of producer states to cut off energy supplies willy-nilly. The lack of readily available substitutes for oil and gas further exacerbates the fears of consumer states. But energy-rich states have concerns too, and they are rooted in energy nationalism realpolitik.


Most, if not all, governments of energy-rich states have either already established or are seeking to establish control over their country’s natural resources, which they — very fairly — see as part of their sovereignty and, at a time of record high prices, a means to development. These producer states fear ‘consumer cartels’ almost as much as consumer states fret over a possible disruption of supply.

They may drive a hard bargain, but they also need and depend on consumers, like any storekeeper or market seller. Global energy producers, such as Saudi Arabia, Russia and Iran, rely heavily on exports of oil and gas, with Russia’s federal budget receiving — on some calculations — up to 25% from the sale of energy commodities.

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