Great Powers and the World Oil Market: China’s Rise and Oil Export Geography

• In Event: Exploring the New Frontiers of Natural Resource Politics

Abstract

In this paper we address the role of great power alliances with oil producers and how they have changed in the last 50 years. Crude oil is the single largest commodity trade in the world, and most countries import oil from a small number of oil-producing countries through the international market. As such, there is always highly asymmetric structure. How does the emergence of a new great power, such as China, change the structure of the international crude oil market? If the great power has oil-producing allies, how does it affect the oil market? We employ spatial network analysis to answer the first question, where the oil trading countries are considered nodes, oil trading relations are considered edges, and weight is oil trade volume. Through spatial network analysis, we compare the crucial values of centrality, density, and modularity of the oil trade network before and after China’s emergence as a major power. We conclude that the oil trade network has become more centralized and ordered since China became a major oil-importing country in the mid-2000s. Traditional key oil-importing countries—the United States and Europe—lost influence in 2012 while China’s in-degree centrality in the network increased dramatically. Moreover, China has created its own trading blocs in the Middle East and Central Africa, which also indicate the critically increased influence of China within the global network. We then turn to the second question, accounting for whether major powers are oil producers or not, using global data from 1945 to 2010. We demonstrate that this question is key to understanding whether great power allies render oil producing countries more likely to initiate conflicts. The more import-dependent the major power, the less likely pressure on its producing allies, both before and after China’s rise.

Authors

• Hye Ryeon Jang, University of Florida

• Benjamin Smith, University of Florida