The End of the World Is Just the Beginning: Mapping the Collapse of Globalization

After World War II and the gradual end of imperialism, oil became a global commodity, and the US Navy guarded its transport. Former colonies of imperial powers, such as Iran and Nigeria, became independent oil suppliers to the world in the globalization era. As economic growth exploded among the US and its allies, their need for oil outpaced production capacity. Since global trade would collapse without oil, US foreign policy became aggressive and garnered much resentment. For example, the US sponsored a coup in Iran in 1953. After the Cold War, the US angered Russia by approaching former Soviet Republics in search of oil and undermining Russian “influence in” its “own backyard” (230). The need for oil kept increasing, and prices hit a historical high in 2008. The US, which might have preferred a less active role in global affairs (231), had no choice but to ensure the security of the global oil supply or risk economic havoc at home.

In 2022, the bulk of oil came from three areas. The Persian Gulf supplies half of the internationally traded oil and 20% of total oil. Countries in the Gulf rely on outside workers to keep the oil flowing and lack technical competence. Yet these countries don’t have sufficient naval power to protect their coastlines let alone trade routes. The former Soviet region comprises the second-largest source of internationally traded oil. However, Russia’s oil fields are old and remote. Pipelines can be sabotaged, and export routes pass through enemy territory. Not yet back to Cold War production levels, Russia’s industry will experience further setbacks because of Russia’s war on Ukraine. The third-largest oil-producing region is North America. The shale revolution has made the US the world’s largest single-country oil producer. The US is therefore not dependent on global trade or foreign technicians for access to oil.

The text highlights several things that could go wrong in the absence of global trade. For example, Egypt could restrict cargo in the Suez Canal, or piracy could become prevalent off the coast of Africa. Without the US protecting global oil distribution, the author estimates that 40% of current oil supply would be lost due to expense in a world where capital is no longer cheap, transport routes are dangerous, and/or access at some sites is difficult.

Oil is unique for several reasons. It has price inelasticity, meaning that slight increases in demand or decreases in supply can result in wild price swings. Because few places export oil and transport routes are concentrated, it is subject to disruption. Oil tankers are slow and easy to identify. Because oil prices are inseparable from other goods, a change in its supply or demand impacts the “entire system.” Without global trade, eight countries, including the US, can contain these effects, but for the rest of the world, “the picture darkens in every conceivable way” (253). Several other countries, such as Brazil and Nigeria, can produce oil but even together could not come close to meeting worldwide demand. Additionally, oil must be processed at refineries specifically geared to the type of crude. No two crude streams have the same makeup, and refurbishing refineries is costly.

Another fossil fuel, natural gas, comes from the same three regions. Typically delivered via pipelines, natural gas is used to generate electricity. Without it, the “lights literally go out” (260). Despite climate change, the text argues that the world is “nowhere near being ‘done’ with oil” (263). Oil is the material for petrochemicals, which are major inputs in several products, including tires and medical equipment. Greentech, or solar and wind sources of power, are unsuitable for large swaths of the earth and are problematic in cities. Wind and solar power can take only “a dozen or so percentage points off fossil fuel demand” (271). Without access to oil, many countries would likely revert to the dirtiest fuel, coal.

The “end of global energy heralds the end of the lives we know” (277). The greatest shortages would occur in Northeast Asia and Central Europe, places at the end of vulnerable supply lines. China already has had rolling blackouts. Countries in a better position, such as the UK, France, and Japan, would still face a difficult pricing situation. The US would be best situated given its internal resources.