My Saturday mornings are usually lost in the blurry haze of lethargic activity. I roll out of bed (literally - I flop dramatically onto the floor and groan for a few minutes) before stumbling to the bathroom to take a shower. A half an hour later, after steamy water and a bowl of cereal, I buckle myself next to my dad and brace myself for an hour's ride into New York City. I used to think it was the coolest thing ever to get to go to the city on a weekly basis, to go to Columbia and listen to (usually) fabulous lectures by brilliant students and professors, but, as with most things, the magic wore off with time. I still get excited in class when we learn something mind-blowing, of course, but I started to approach the whole affair with a certain amount of tedium. I was tired, plain and simple. That all changed earlier this year, when I got to take a course on "Energy and the Modern Economy." I entered the course sure that I would spent each class doodling in the corners of my notebook. What interesting things could I learn about the economy? I had always hated finance and economics with their immense reliance on probability and statistics, so I viewed the class as another chore to get over with. I was absolutely sure the professor would be a sixty year old man who spent his youth running around on Wall Street before retiring to Columbia to drone on about the benefits of capitalism. Great.
Instead, I was greeted on the first day by an amazingly witty, knowledgeable, fun PhD student who was barely in his thirties. As the weeks passed by (time went by much quicker than I anticipated), I learned more about coal and solar and biofuels, but above all, I learned about oil. I learned that the world runs on oil - literally. Entire countries' economies hinge on national oil companies' profits while on an individual level, citizens need oil to power their transportation and their lives. International diplomatic relationships are often shifted entirely based off the global concern of oil - after all, the price of oil is set on an international scale and is often transported between countries, mandating that a certain amount of pleasantry and maneuvering is required to keep oil flowing and avoid disrupting peoples' lives. Take the United States' relationship with Saudi Arabia, for example. American officials may frown upon and at times be completely outraged over Saudi Arabia's "religious police" and the restrictions they impose upon women and their citizens, at large, but that frustration is carefully hidden behind a mask of remaining allies to keep oil from destabilizing. As we discussed more and more of the intricacies of oil, I finally realized just how interconnected, and how interdependent, our world is.
While my energy class ended a few months ago, I've begun to notice how prevalent the topics I learned about are. Every time I browse through headlines in a national newspaper, I see something related to oil, usually tied in with other major international headlines. This week, that story came in the form of a New York Times article describing how rising tensions in Yemen have introduced the possibility of future volatility in the oil market and caused a price spike this Thursday. In Yemen, a group of Houthi rebels are backed by Iran and fight against the country's president who is backed by major oil producer Saudi Arabia. The conflict has led to recent bombings which, in turn, has set the international economic community on edge. While Yemen does not produce a whole lot of oil (usually only around 130,000 barrels a day compared to Saudi Arabia's 9,460,000 barrels per day), it is critically located on the Bab el-Mandeb Strait. Countless oil tankers go through this strait, passing between Yemen and Africa, in order to get to the Suez Canal and export oil to other nations (see the map below). Strife in Yemen could mean disruptions in naval traffic, leading to the slowing down of oil deliveries and the stagnation of the global oil economy, at large (read more about this here).
This is not the first time in history that political unrest raised fears about the economic future of oil. Shortly after World War II in 1951, Iran's government underwent a radical shift as a new nationalist leader, Mohammed Mossadegh, took center stage and sought to nationalize Iran's oil reserves. Britain immediately grew concerned, worrying that this governmental change would crash its Anglo-Iranian Oil Company, and so began economic sanctions against Iran. The US under President Truman remained largely neutral at first, but later grew to mistrust Mossadegh, worrying that his actions would wildly destabilize Iran's economy. This could mean that the USSR would step in and offer economic assistance to Iran, spreading communism into a new part of the world. Very concerned about the Soviet Union, the US quietly aided a coup d'etat to throw Mossadegh out of power two years after the start of this Iranian Crisis.
These lines of thinking probably seem a bit paranoid - so there is/was unrest in the Middle East, what else is new? So what if the oil market goes up or down a little? The reality, though, is that even a small degree of conflicts in this extraordinarily volatile, but fundamentally important part of the globe makes the entire world hold its breath. We need oil and are desperate to maintain peace in order to get it. Decreases in oil prices lead to happy voters and smoothly moving industries, while increases or sudden oil shortages leave the world on stand-still mode. Fluctuations in oil prices change standards of living at home in the US and directly impact citizens in a way that few other resources can, so every political problem in the Middle East leads to an undercurrent of worry with the question, "What'll happen to oil?" running in everyone's head.