How oil still rules the world

Mel de Silva writes that oil has shaped wars, toppled governments, and distorted global power for more than a century, and as the world strives to liberate itself, its control becomes more dangerous.

WHEN EDWIN DRAKE When oil was struck in Pennsylvania in 1859, refiners celebrated kerosene but didn’t quite know what to do with all the “worthless” gasoline.

Them I burned itor thrown into rivers, with predictably dangerous consequences. But within 50 years, this “worthless” by-product, along with various petroleum distillates, became the secret architecture of modern life and the trigger of war.

Oil didn’t just fuel the modern world; realigned global power.

Oil as the original power broker of our modern world

Pennsylvania’s early success sparked a global race. By the early 1900s, exploration on four continents was reshaping industrial and imperial ambitions. When explorers were funded by Australian-British entrepreneur William Knox D’Arcy After striking oil in Persia (modern-day Iran) in 1908, Britain quickly became aware of the strategic interests. bought one controlling interest He gained a solid place in the future of the region by being involved in the Anglo-Persian Oil Company (BP’s ancestor).

Later collapse Ottoman Empire After World War I, a new geopolitical competition opened for the Middle East. Sykes-Picot Agreement boundaries were drawn with source control in mind and 1928 Treaty of Achnacarry He formalized a Western oil cartel. British and Soviet Union Occupied Iran during World War II And I set up a ruler It is compatible with Western interests.

Former Prime Minister determined to reduce foreign control over Iranian resources Muhammad Mossadegh tried to nationalize Anglo-Persian Oil Company In 1951, Britain responded with an embargo and legal pressure. When the International Court of Justice refused to interveneBritain turned to the United States for more direct intervention.

So in 1953, the CIA and MI6 launched a study. coup He eliminated Mossadegh and restored the Shah to power. Nationalization was canceled and the Shah suppressed all subsequent political opposition.

Geopolitics has a short memory, history has none

Under 1957 Atoms for Peace programThe United States actively provided nuclear training and technology to Iran. But it came together 1979 Iranian revolution and the Western-backed Shah was replaced by an anti-Western theocracy. seize an opportunity, Saddam Hussein invaded Iran 1980with Support from Western governments.

Oil production in the USA reached its peak 1972The 1973 embargo shook the West and Carter Doctrine He declared that the Persian Gulf was a vital US interest that must be defended by force. Revolutionary Iran was a threat not only ideologically but also strategically, and Saddam Hussein emerged on the scene as a means of containment.

But when Saddam Hussein went on to invade Kuwait, he crossed a line that threatened Western control over oil supplies. A US-led coalition intervened, citing international law and Kuwait’s sovereignty. But the unspoken calculation was clear. The inclusion of Kuwait and potentially Saudi Arabia in Iraq would give Saddam influence over global energy markets that no US administration could tolerate.

Meanwhile, nuclear technology, which the United States once promoted, became the justification for decades of struggle. Sanctions and diplomacyresulting in a result 2015 agreement The first Trump Administration abandoned in 2018.

US Director of National Intelligence in March 2025 He told Congress He said Iran does not build nuclear weapons. But three months later Iran A violation was declared fulfilled their nuclear nonproliferation obligations, and Israel and the United States military attacks It’s about Iran’s nuclear facilities.

Taken together, these episodes show how oil politics distorts history: The United States supported Iraq’s invasion of Iran to protect its energy interests and later attacked Iran over a nuclear program it once promoted. When power moves, it often leaves contradictions behind.

Venezuela: When power no longer needs masks

A similar pattern was emerging in Venezuela a few weeks ago, although less effort was made to conceal the motives.

In January 2026, US special forces captured the Venezuelan President Nicolas Maduro on charges of narcoterrorism. President Trump said that the United Statesto run” Access to Venezuelan and oil reserves, roughly one-fifth of the world’s total.

For decades, American and British companies developed Venezuelan oil. But gradually Venezuela took back its resources through legislation, OPEC membership, and eventual nationalization in 1976. Venezuela “stole” American oilAs members of the Trump Administration have suggested, it requires creative interpretation of the historical record and ignoring the principle of informality. Permanent Sovereignty over Natural Resources founded by UN General Assembly resolution 1803 In 1962. But the government rarely waits for legal justification.

The stories we tell that make extraction feel like civilization

Military and economic power do not operate in a vacuum. They are underpinned by cultural narratives about who owns resources and who is entitled to those resources.

Oil companies like BP once used Iranian oil as a tool. Natural reward for Western enterprise. While advertisements portrayed Western engineers as heroic modernizers, Iranians mostly appeared as laborers or background characters in their country’s story. Like Edward Said observed orientalismThe basic assumption is that the Western consumer has a right to the world’s resources that the colonized “other” does not.

This cultural infrastructure still shapes assumptions about growth and abundance in rich countries, while refusing to seriously consider the physical limits of a finite planet that sustains us. For some it means a larger share, for others it means a smaller share. This disturbing arithmetic is the cultural soil in which imperialism is revived.

But change is in the air. We can slowly and imperfectly learn to say no to the next iteration of imperialism.

Why is oil dependence becoming strategically impossible?

Beyond the ethical arguments there is a purely strategic argument. The longer we stay in a rigged game (pun intended), the higher the stakes become.

The closure of the Strait of Hormuz in 2026 made this clear. A state with limited naval capacity disrupted a single transit point using mines, drones and insurance pressures. The architecture of global energy security could be constrained in a matter of days.

This is not a durable system.

The world has never had a clearer strategic reason to accelerate the transition away from oil. But the forces that benefit most from the current system are among the most powerful actors shaping the response. Oil is leverage, and those in power intend to keep the oil.

Using profound power to build resilience instead of addiction

But history also offers examples of countries using their resource power to build resilience rather than entrenching dependency.

Norway funneled its oil wealth into a sovereign wealth fund now worth over $2 trillion, treating the oil revenue as income. gift to future generations rather than an unexpected event for now. via Saudi Arabia Vision 2030It uses oil revenues to build economic and technological capacity in a post-oil world.

The distinction between the resource power used to sustain dependence and the resource power used to build resilience is the central choice facing every oil-dependent country. Whether we can make this transition before the next round of resource struggles reshapes the global order is perhaps the central question of our time.

Mel de Silva is an environmental sustainability consultant leading decarbonization and climate change resilience programs for some of Australia’s largest companies and government agencies.

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