Petroleum, or crude oil is a fossil fuel.
It is the result of organic matter transforming into hydrocarbons over millions of years.
Generally buried in the form of a deposit, crude oil sometimes appears on the surface
of the earth, which is why it has been known to man since ancient times.
Around the world, oil was used as sealing material in construction and for medical purposes.
But it is only in the middle of the 19th century that its consumption would explode.
Europe and North America, in the midst of industrial revolution,
have rapidly increasing energy requirements that are mainly met by coal.
Interest in oil intensifies throughout the world.
From the Russian Empire, to Europe, to North America, the first modern drilling location.
In the United States, this causes a rush of black gold
and the country became the largest oil producer in the world.
Initially, distilled oil replaces the burning of whale oil in lamps.
It offers a better calorific value than coal and is easier to transport than gas.
Oil consumption rises in the early 20th century, especially in the field of transport,
with the development of the automobile, the reconversion of ship engines,
and the aviation boom during the World War I.
Crude oil, once extracted, is distilled in a refinery to separate the hydrocarbons as needed.
The lighter molecules evaporate to the top of the distillation column where the temperature
is around 20 degrees Celsius.
Liquefied Petroleum Gases are harvested and used, among other things in lighters and in kitchens.
Between 30 and 105 degrees Celsius, gasoline for cars is produced.
Between 105 and 160 degrees Celsius, naphtha is created, used in petrochemicals in order
to create plastics, synthetic textiles, drugs and cosmetics.
Between 160 and 230 degrees Celsius, kerosene is obtained for aviation.
Between 230 and 425 degrees Celsius, diesel is created for cars and heating oil for domestic purposes.
Finally, the thick, high-sulfur residue is heated to above 450 degrees Celsius
to form heavy fuel oil used by ships, and to obtain bitumen used for road construction and roofing.
Crude oil was transported in barrels with a capacity of 42 US gallons,
or slightly less than 159 liters.
The barrel thus became the unit for setting oil prices.
More and more oil deposit discoveries are made worldwide, including in Venezuela
which becomes the second largest global producer.
In the Middle East, where Britain is present, Western companies seize the new market,
giving a portion of their profits to the local country through royalties.
During World War II, demand for oil skyrockets and the resource becomes a major international issue.
At the end of the war, the United States signs an alliance with Saudi Arabia,
guaranteeing security of the country in return for privileged access to its oil.
Western companies dominating oil markets contribute to nationalist movements in producer countries.
In Saudi Arabia, an agreement is signed allowing the country to receive 50% of oil profits.
In Iran, negotiations with the Anglo-Persian Oil Company fail, following which
the prime minister nationalizes the country's oil.
In response, the US and the UK secretly organize a coup to overthrow the prime minister.
The Shah of Iran remains in power and then allows the exploitation of oil in the country
by a consortium of Western companies.
In the USSR, the discovery of oil fields in Western Siberia pushes the country to invest in its exploitation.
Plentiful and cheap oil overtakes coal to become the primary source of energy in the world.
So far, its price remains below 3 dollars a barrel.
Five major oil-producing countries decide to unite to derive more benefits.
They create OPEC, the Organization of Petroleum Exporting Countries.
Together, they want to counter the dominance of Western companies, to increase oil prices
and to have a common policy.
The organization would gradually be joined by new nations.
In 1972, the United States reaches peak production and is forced to import oil to meet its increasing needs.
As the United Kingdom withdraws from the Middle East, security in the region is provided by
Iran and Saudi Arabia which are armed by the West.
After the Yom Kippur War between Israel and the Arab states of Egypt, Syria and Jordan,
OPEC for the first time uses oil as a political weapon.
An oil embargo is imposed on Israel's allies and production slows to inflate the price of oil.
This is the first oil crisis which hits industrialized countries
whose economies now depend on the black gold.
Countries try to reduce their oil consumption and invest in alternatives
such as nuclear and hydro power, or reinvest in coal.
Oil companies in turn explore the world in search of new deposits.
Sources at sea, called offshore sites, are discovered and exploited, particularly in the North Sea.
The Soviet Union becomes the largest producer of oil in the world, while in the United States,
production increases with the exploitation of Alaskan oil.
In 1979, the Iranian revolution takes place.
The Shah's regime is overthrown and replaced by an Islamic republic that sets up an anti-Western policy.
Oil production in the country falls, causing the second oil crisis.
Following border disputes, tensions between Iran and Iraq lead to 8 years of war.
Globally, non-OPEC oil production rises and exceeds production by OPEC countries.
Henceforth, supply and demand sets the price of a barrel rather than OPEC.
However, for industrialized countries, the stability of the Middle East still remains a priority.
Thus when Iran and Iraq begin to target oil facilities in the Persian Gulf,
hundreds of Western military vessels step in to ensure the supply of oil.
At the end of the war, Iraq is weakened and indebted to Saudi Arabia and Kuwait.
But having received large amounts of military equipment,
the country has the most powerful army in the region.
Iraq takes advantage of this situation to invade Kuwait following a border dispute.
An international coalition is formed under the UN, and led by the United States,
to intervene and neutralize the Iraqi army.
This time the United States establishes a permanent presence in the region by installing
military bases and signing defense agreements with Gulf monarchies.
The country imposes a series of embargoes against Iran and Iraq, which it considers rogue states.
Saudi Arabia, for its part, wants to once again become a major producer of oil.
The country has the largest known oil reserves in the world and floods the market
to become the largest producer of crude.
In Russia, new investment revives the oil industry.
But as the price of oil is low, and offshore operations unprofitable,
oil companies find themselves in difficulty.
In 1998, they begin to merge together and combine forces.
6 giant oil companies are born that would become the richest and most influential in the world.
In the Middle East, the military presence of the United States begins to raise concern.
On one hand, radical Islamists do not want the presence of an Israeli ally on their soil.
On the other, some consider the sanctions imposed on Iraq and Iran as too heavy.
On September 11, 2001, the United States becomes the target of a major terrorist attack on its territory.
15 of the 19 terrorists were Saudis, raising grave concerns.
The US actively seeks new sources to reduce oil dependency on the Saudis.
In Africa, production accelerates after the discovery of large offshore fields off the Gulf of Guinea.
In the Middle East, the United States invades Iraq under the pretext of its war against
weapons of mass destruction.
A few years later, the country's oil would be back on the international market.
Iran for its part opens its market to new rising Asian powers, such as China and India.
The abundant supply of oil in the world stimulates the economy.
Growth skyrockets, mainly in emerging countries.
In addition, Wall Street traders speculating on black gold, pushes prices further upward.
But the financial crisis of 2008 would cause a sharp drop in prices.
Venezuela, over a few years, discovers it holds the largest known oil reserves in
the world, putting it ahead of Saudi Arabia.
With more global demand for oil, its price rise again.
The "unconventional" exploitation of petroleum becomes profitable despite the difficulty
in its pumping and treatment.
Thus in Canada and Venezuela, oil companies rely on the exploitation of huge oil sand deposits.
As this thick bitumen is found near the earth’s surface, forests are razed to extract the oil.
It is then transformed with more expensive, highly polluting techniques.
While offshore now provides 30% of global production, oil companies try exploiting deeper deposits.
In the Gulf of Mexico, an attempt to make the deepest borehole in the world fails,
causing one of the world’s worst known oil spills.
In the United States, improved technologies, such as fracking, now make it possible
to pump shale oil, the reserves of which seem enormous.
This oil is wedged between different layers of solid rock.
A fluid is injected at high pressure to break the rock and release the black gold which is then pumped.
Numerous such reserves discovered in the United States cause to the country's production to explode.
The fact that the biggest oil consumer in the world becomes a bigger producer
does not please its Saudi ally.
Saudi Arabia then wants to make the production of unconventional oil unprofitable by dropping prices.
To achieve this, Saudi Arabia persuades OPEC to flood the oil market.
The price of the barrel drops, making oil production barely or sometimes not at all profitable.
But the oil industry of the United States resists and continues to increase its production.
With oil abundant and cheap, world consumption continues to rise
and approaches 100 million barrels per day.
Two-thirds of the oil used in transportation industry is the main emitter of CO2.
In the maritime sector, heavy fuel oil used by ships
emits 3,500 times more sulfur than diesel fuel, causing severe air pollution.
The United States and Europe react by creating zones where heavy fuel consumption is prohibited.
Since the beginning of the modern era of oil, many oil spills cause major environmental damage,
with the Niger Delta probably being the most affected region with 60 years of oil spills largely ignored.
Saudi Arabia undergoes its own policy changes, being faced in recent years with a large fiscal deficit.
OPEC countries are forced to appeal to other producing countries
to together try boosting the price of oil.
This inlude Russia, the second largest crude exporter in the world.
The United States, in contrast, continues to increase production to keep prices low
and to support growth and the economy.
The country eventually becomes the largest oil producer in the world.
While IPCC experts are sounding the alarm and call for drastically reducing CO2 emissions
to limit global warming, we have currently found enough oil to carry on for at least
another 50 years at current rates.
Saudi Arabia now speaks of diversifying its investments to prepare for the post-oil era.
Iran, which has the 3rd largest oil reserves in the world, suffers since 2018 from sanctions
imposed by the United States aimed at choking its oil sales.
In Venezuela, the countryy is hurt by the low oil prices
and the country never really benefits from its huge reserves.
Political instability could potentially impact exports, which currently mainly benefits China and Russia.
Meanwhile, oil companies remain among the most powerful entities in the world.
In 2017, five of them figure in the list of global top 10 companies with the highest turnover.
The International Maritime Organization imposes drastically reduced sulfur emissions goals
for vessels by 2020.
This could force the industry to abandon heavy fuel oil in favor of other hydrocarbons,
which may push up its demand and price.
If the price of a barrel increases, the exploitation of unconventional oils could restart with renewed vigor.
This includes areas such as the Arctic, which shows promise of holding vast deposits.
And with polar ice caps melting, it makes it possible to explore new areas potentially rich in oil.