Source: The Atlantic, 12/13/2011
ASP Senior Fellow Andrew Holland is a featured author.
“…Political and economic changes also brought new oil to market. The Baku-Tblisi-Ceyhan (BTC) pipeline brings crude oil drilled in the Caspian Sea to market through Azerbaijan, Georgia — two former Soviet Republics — and Turkey. The BTC pipeline, which opened in 2006, would have been impossible 20 years before.
The expansion of global oil production has been accompanied by oil market consolidation. Mergers of oil companies like Exxon-Mobil, Chevron-Texaco, BP-Amoco, along with significant infrastructure investments created the first truly global oil market. Oil contracts are traded in liquid commodity markets that create uniform oil prices around the world. Due to these changes, price differences in oil only reflect actual substantive differences in quality or transportation costs.
These developments were supposed to alleviate the energy security concerns that the U.S. faced after the 1970s. America would no longer be held hostage to supply shocks that could cut off our access to oil. American soldiers would no longer have to fight to protect sources of oil…”