The Political Economy of Oil: The Limits of Our Ability to Prevent Failure
This chapter deals with the tensions created by the co-existence of cooperative and competitive approaches to energy security in the context of oil. It looks at this issue from three perspectives. Firstly, the existence of ambiguities about the concepts in both practical and theoretical terms. Secondly, the historical oscillation between biases for both concepts as a main response to perceived failures. Thirdly, the fact that the complexity of modern oil markets exacerbates these challenges. It concludes by noting that, although practical and theoretical efforts to operationalise competition and cooperation have improved our ability to achieve energy security with regard to oil, neither competition nor cooperation can, at least for the time being, avoid some (and often considerable) degree of failure. Although we should continue to try to avoid critical failures inasmuch as possible, we should also stop designing oil markets with the idea of avoiding failure as the main and only objective. Instead, more attention should be given to discussing how either competition or cooperation can help us recover efficiently from the failures that do arise – even if trade-offs are necessary.
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