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Oil Commodity

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Oil: More than just a Commodity To state that oil is just a commodity would almost be ignoring the role it plays in our society. War strategy as we know it today may not exist without the use of oil. Due to the difficulty of transport and manufacturing without oil, the economy of the US shows dependence on oil in a way that it has not typically shown on other goods. Oil is not just a commodity because it has more economic and militaristic implications than any one good. Although oil can be traded for funding or other materials, it plays a much more vital role in our maintaining our everyday society. Historically, the nations or states with the most access to oil have been considered more powerful economically. There are few other goods that …show more content…

Current weaponry such as tanks, jets, aircraft carriers, and Humvees are dependent on oil products for use. If the US were to have empty oil reserves, several weapons and transport options would become irrelevant. This idea was behind much of the military tactic used in World War II. As Yergin (1991) mentions, the US blocked Japanese fuel supplies, bombed German synthetic fuel plants, and only exported oil products that the Allies machinery used at one point. These actions ultimately aided the Allies win. In this context, oil is more a weapon than it is a general commodity. As shown by this example, oil availability and pricing is a matter of national security because it affects the ability of a nation to defend …show more content…

Although there is not truly a free market as economists define it, there is certainly still a correlation between supply, demand, and price. The oil industry in 2008 a prime example of this. According to OPEC, oil prices were astronomical at over $120 to $140 per barrel for the middle of the year. he only type of car to show an increase in sales from 2007 was the small or compact car, which showed a 1.2% increase over 2007, while all other vehicles including trucks, SUVs, vans, and luxury vehicles had at least a 9% decrease in sales. The bus came back as a way to get around and the number of domestic flights decreased due to increased flight cost. Although oil is only one good, its loss can impact several areas of the economy, with transport being one of the first industries to

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