Is The Era Of U.S. Energy Dominance Already Over?
The global oil industry is a highly lucrative sector that is strongly influenced by geopolitical developments. As the Post-Cold War era comes to an end, a new status quo is arising. The U.S. was once the only player with the capability to significantly influence energy markets around the globe. The country’s military and global alliances proved powerful tools in controlling developments in regions such as the highly volatile Middle East. But Washington’s global reach is fading and both Russia and China are on the rise.
Moscow has become a force to reckon with in several regions due to a combination of diplomacy and energy politics. In addition to that, Washington’s foreign policy blunders have created power vacuums for other actors to take advantage, blunders such as the recent unexpected withdrawal from Northern Syria. Arguably, Russia has now become the most important power broker in the Middle East. Moscow’s plans, however, are not regional, but global. The first-ever Russia-Africa summit is a testament to the Kremlin’s global ambitions.
Moscow has also fostered strong relations with several countries in Latin America. Ever since the Monroe doctrine of 1823, the U.S. considers Central and South America as its ‘backyard’. Countries such as Venezuela, however, have resisted Washington’s power and influence. Therefore, when the rumor spread of the sale of South America’s biggest energy company to Russia’s Rosneft, panic spread in Washington of potentially another foreign policy setback.
Venezuela’s national oil company is estimated to be worth $186 billion and is the country’s economic engine. The Orinoco region, where the majority of the country’s oil is produced, contains approximately 300 billion recoverable barrels of oil and is the biggest in the world. Despite the massive energy reserves, Venezuela is spiraling towards an economic and political meltdown.
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