Lesson 304 - Petroleum flows & trade chokepoints

Oil moves the world. In a consumption-based economy, the production of goods and services needs to be constant. Consumerism feeds on products, and products are made in factories. In a consumption-based economy, those factories can never stop. The factories are located on the periphery and are powered by oil. That’s why oil moves the world.

Oil production has been increasing since the 1850s, and exponentially since 1920. Known as black gold, petroleum is found using extraction wells and stored in barrels. The world consumes 36 billion barrels of oil per year. The main oil producing countries are those in the Middle East, United States and Russia. The countries with the largest oil reserves are Venezuela, Saudi Arabia and Canada.

Ports, where everything comes from

After petroleum has fueled the factories, the manufactured products must arrive to their destination -that is, to the hands of the consumer. Production and consumption usually are separated by thousands of miles, so transportation and trade processes are key to make the economy work. Once the product is manufactured in the Periphery, it has to reach the Core (the western countries). Here the port appears as an important infrastructure: it’s in the port where products start their journey.

The next table shows the most important ports in the world, in terms of container transit. The way to measure the capacity of a container ship or a port is counting the number of 20-foot-long containers (TEU) that they can store. For example, the largest container ships can store up to 23.000 TEUs (that is, 20-foot-long containers), and the Port of Barcelona moves 3.420.000 TEU each year.

Chokepoints in trade flows

In the vast extension of our world there are certain spots that have become decisive to the correct functioning of the economy -and ultimately society in its own. Those spots are the so-called chokepoints. Chokepoints can be defined as specific geographical locations through which global trade passes. A chokepoint is usually a narrow maritime strait where container ships or petroleum tankers pile up while they wait their turn to pass. Good examples of chokepoints are the Panama Canal, the Malacca Strait or the Suez Canal.