Given the limited importance of Persian Gulf supplies for the United States, those who argue its importance often claim that the United States is providing a free supply-protection service to Europe and Japan. But Europe doesn’t seem to be worried about Persian Gulf oil supplies: EU energy security debates are dominated by the problem of dependence on Russian gas. And while Japan worries more, those concerns weren’t enough to stop the Japanese government closing all nuclear power plants in response to the Fukushima disaster.
As in other areas of policy, the battles of the 1960s and 1970s continue to shape thinking about oil. It’s time to recognize that in the second decade of the 21st century, oil is just one commodity among many in an economy that is mainly driven by services and information.
John Quiggin is a professor of economics at the University of Queensland, Australia and adjunct professor at the University of Maryland, College Park. He is author of Zombie Economics: How Dead Ideas Still Walk Among Us (Princeton University Press, 2010).