Lesson 3 Introduction

Concepts to Consider for the Lesson

We are used to hearing about important oil producing areas around the world. But they did not all come online at the same time. Oil exploration evolved over time, with certain periods of history focusing on specific geographies. In Lesson 2, we studied the development of the markets in Russia, Europe, and the Far East. In Lesson 3, we start to see the expansion into what we now know as the Middle East oil region, one of the most important, and prolific, oil markets in the world. We will discuss the beginnings of oil discovery in the Middle East, specifically in Persia, the clash of British and Persian cultures, and the emergence of Anglo-Persian Oil Company.

This lesson also covers the changes in the markets as well. Recall changes in Lesson 1 when more uses for oil products were being developed. Then in Lesson 2 was the automobile. Lesson 3 will introduce us to the role of the internal combustion engine and the need for gasoline. It was not that long before where gasoline as a by-product was seen almost as a nuisance, and now it is evolving into its own product in demand.

Lesson 3 also reminds that even as new concepts crystallize; some old habits die hard. We still see the up and down aspects of the market with companies oscillating between doing quite well and experiencing imminent collapse. We also still see squabbling among companies, distrust, and cutthroat competition, punctuated with moments of cooperation for the greater good. But we must realize that the “greater good” in many cases meant to ensure their own survival.

As important as all of that is, one of the most impactful elements of Lesson 3 content is the emergence of oil as a strategic commodity- becoming central to global crisis and military positioning. The uptake of the internal combustion engine and its use of gasoline, combined with the transition from coal to oil, completely changed the face of military readiness and national security. As you will read, it is safe to say that the use and availability of oil drove the progress, and ultimate outcome, of World War I. The transitioning of the Navy from coal to oil is one thing but imagine the rest of the military equipment if they didn’t run on oil and had to use coal!

Learning Objectives

By the end of this lesson, you should be able to:

• Recall course concepts relating to Asian oil development and World War I
• Demonstrate an understanding of the role of oil in relation to pivotal events in history
• Discuss the role of oil in business applications, global markets, conflicts, energy security, and various unconventional applications
• Produce an evaluative statement that justifies your answer to a posed homework question

What is due for Lesson 3?

This lesson will take us one week to complete. Please refer to the Course Syllabus for specific time frames and due dates. Specific directions for the assignment below can be found within this lesson.

Questions?

Each week an announcement is sent out in which you will have the opportunity to contribute questions about the topics you are learning about in this course. You are encouraged to engage in these discussions. The more we talk about these ideas and share our thoughts, the more we can learn from each other.