The story of oil–black gold–begins when tiny plankton that live at and beneath the surface of lakes, rivers, ponds, and ocean; become trapped in silt. Sedimentary basins, where ancient seabeds used to lie, are key sources of petroleum. Oil wealth was created by the earth long before it was found, let alone harnessed.
More than 5,000 years ago, the ancient Mesopotamians used oil collected from large seeps at Tuttul, in modern-day Hīt, Iraq, mainly for medicinal purposes. Thousands of years would pass before the true purpose of black oil; which was to illuminate and give light–would be revealed and actualised.
Today, petroleum is found in vast underground reservoirs where ancient seas were once located. Petroleum reservoirs can be found both beneath land as well as under the ocean floor. Crude oil is extracted with drilling machines.
The importance and significance of oil as an energy source to create and give light is difficult to explain to the modern world; despite how reliant we are on it. The growth in energy production during the 20th century was unprecedented and increasing oil production has been by far the major contributor to that growth.
In 2019, Venezuela, Saudi Arabia and Canada are the three countries with the largest amount of oil reserves. The production and consumption of oil is of vital importance in international relations and has frequently been a decisive factor in the determination of foreign policy.
Assertions have been made that while a country’s oil wealth increases long-run economic growth, it also makes governments less accountable to its citizens. The resource curse, which is also known as the paradox of plenty, has been used to explain the failure of many resource-rich countries to benefit fully from their wealth.
It suggests that while one might expect to see the emergence of a golden age or era after countries discover new found wealth; resource-rich countries tend to be susceptible to higher rates of conflict and political instability. Nevertheless, determining the effects of oil wealth is tricky as not all countries respond to ‘oil wealth’ in the same way.
Regardless, the fact remains that the economic benefits of oil can continue to accrue and accumulate despite weak political institutions.