Investing in Energy Essay Example | Topics and Well Written Essays - 1250 words - 1

Investing in Energy - Essay Example This research will begin with the statement that one reason for the oil foreign policy being different from the conventional Prisoner’s Dilemma game is that we are dealing with exchanges in the world’s political economy. One of the most common and fundamental interests of a multi-national corporation is the land rights on which oil can be produced and manufactured. Most of the oil consumed in the world today has moved from one country to another. It is, by far, the largest single commodity in international trade. This is why it is important. The Red Line Agreement of July 31, 1928, is an example in the history of oil co-operation, in which the United States did not get what it wanted in negotiations. Negotiations for the agreement began with the US and Great Britain squaring off for access to oil in the region that is now Iraq. At the end of World War I, the San Remo agreement awarded Britain mandate over Iraq, but the Americans opposed this. They claimed that since the war was won by the Allies collectively, oil exploration rights in the Iraq region should be shared. However, the British refused. Facing this impasse, the seven American oil companies decided to pursue their oil interests by official means through the Turkish Petroleum Company (TPC, later known as the Petroleum Company). Thus, negotiations with the TPC began in 1922, with the Americans actively pursuing the open-door policy. Essentially, it was in their interest to be assured that they had access to the oil regardless of the new developments that took place in oil production, in the Mesopotamian region. This was a critical time for the Germans and French since the US was making the transition from being one of the major providers of oil to one of the largest importers. One of the biggest problems for the American group and their pursuit of the open door policy is what is referred to as the â€Å"self-denying clause.† In the Foreign Office Agreement of 1914, the â€Å"self-d enying clause† prohibits owners of TPC from handling the production or manufacturing of crude oil other than through the TPC.