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Lesson 12 min 20 XP

Oil and Power

How oil became the most geopolitically significant commodity on Earth and reshaped the global order.

The Oil Century

No commodity has shaped modern geopolitics more than oil. Winston Churchill's 1911 decision to convert the Royal Navy from coal to oil marked the beginning of a strategic dependency that continues to this day. Oil fuels not just vehicles and industry but the military machines that project power globally.

The post-World War II order was built on cheap oil. The US, as the world's largest producer until the 1970s, used its energy abundance as a foundation for economic dominance. When American production peaked and imports rose, the strategic importance of the Middle East — home to roughly 48% of proven global reserves — became paramount.

The 1973 OPEC oil embargo, triggered by US support for Israel in the Yom Kippur War, was a watershed moment. Arab oil producers cut production and banned exports to the US and its allies, causing oil prices to quadruple. Gas lines, inflation, and recession followed. The embargo demonstrated that oil could be wielded as a weapon — and that Western economies were dangerously vulnerable to supply disruptions.