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The imminent stock market floatation of Saudi Aramco looks like another step in Big Oil’s domination of global economics and geopolitics. At a stroke, it will create what is likely to be the

world’s most valuable public company, underwrite the modernisation of the Saudi economy and consolidate oil’s position as the one indispensable element of international prosperity. And

Aramco has much to recommend it. It extracts high quality Arabian super-light at a cost of about $3 a barrel using techniques that minimise both emissions and waste; the oil is cheap, clean,

and, at 10 million barrels a day, prolific – who wouldn’t want to invest in it? Those with a wary eye on the future, that’s who. Horizons are long in the oil business, it couldn’t be any

other way given the scale of investment required. Current trends are still good, but the traditional preoccupation with when the stuff is going to run out is increasingly being replaced with

a fear that it is demand rather than supply that will shape the future of oil. Today’s global consumption of 95 million barrels a day will need to drop to something in the 45 to 70 million

range by 2050 if the world is to stop temperatures rising more than 1.5 – 2 degrees centigrade above their pre-industrial level. It’s easy to dismiss climate change as the preserve of pious

Swedish teenagers or those with a penchant for gluing themselves to rolling stock, but when India recognises a climate emergency and the full resources of the Chinese state apparatus get

behind it, something real is happening. In many ways, Aramco’s pitch of cheap, clean and plentiful is anticipating the day when the expensive and dirty producers like Nigeria, Brazil and

Venezuela are forced to quit the market and the Saudi producer will be last man standing in what remains of the industry. So far, so speculative, but let’s speculate a little further. What

if oil – extracted in geographically specific locations by regimes with varying moral credentials and transported over long and vulnerable supply routes – was substantially replaced by other

forms of energy which might be sourced both locally and ethically? The consequences would be profound, and among the first would be the revision of the historic geopolitical assumption that

access to oil is the sine qua non of the successful prosecution of war in the industrial age. History is replete with examples of oil exercising a shaping influence upon competing national

strategies, as a brief glance at the Second World War will show. Even with the scale and invention of the German chemical engineering tradition, both Germany and the allies identified the

inability of Germany to guarantee an oil supply as a critical strategic vulnerability. Throughout the war, this led to the diversion of long range allied airpower to attack the Ploiesti

oilfields in Romania, the only organic source of oil within Germany or a client state. It also led to the Anglo-Soviet invasion of Iran in 1941, a preemptive operation designed

simultaneously to guarantee oil supplies to the Soviet Union and deny them to German forces, then advancing towards the Caucasus. On the other side of the equation, the German summer

offensive of 1942 did not push towards Moscow in order to finish the job started by the initial invasion the year before, but towards the Baku oilfields in Azerbaijan. In doing so, they

chose an economic objective rather than the war decisive target of the enemy capital which all conventional strategic wisdom would have commended; it also led German forces to the fateful

investment of Stalingrad. But the definitive example of oil shaping strategy is Japan’s entry into the war in 1941. Tensions between Japan and the West had been growing throughout the 1930s

as a result of Japanese aggression in China and the wider threat of expansionist Japanese militarism. By 1940 the Japanese had concluded that their capacity for economic growth and military

operations was dependent upon gaining control of the oil reserves held in the Dutch East Indies, even at the risk of a wider conflict that might bring America into the war. In an attempt to

limit Japanese ambition, a coalition of Western powers including Australia, America, Britain and the Dutch government in exile imposed economic sanctions upon Japan, including an oil

embargo, which Tokyo immediately took as an act of war and planned accordingly. The decision to attack Pearl Harbour prefigured the use it or lose it logic that became common currency in the

nuclear age. With only limited fuel reserves left, the Imperial Japanese Navy – always a dominant lobby within government – had to be employed decisively or become emasculated as an

instrument of war. The country, therefore, embarked on a war of national survival with an enemy against which it could never prevail primarily in order to preserve the freedom of action of

its naval service. History admits to few more perverse, perhaps corrupt, passages of strategic decision making. The interplay of energy and strategy does not end in 1945, as the oil crisis

of 1973 so clearly showed, and it is a theme that continues to play today. It would be quite wrong to compare China today to Japan in the 1930s. For China, military power follows on from

economic power, not the other way around. It is militarily circumspect, not adventurist, and is likely to embark on operations only when the balance of advantage lies heavily in its favour.

It is also capable of engaging across a much wider range of options to derive relative advantage than were available to Japan: soft power in all its forms, intellectual theft, the

manipulation of external US dollar holdings, lawfare, attributable and non-attributable cyber or information operations and the chequebook that seems to follow the One Belt, One Road

initiative wherever it leads. All are available singly or in combination to achieve compound effect, but, in the tradition of Sun Tzu, none will be employed at this stage of China’s

development beyond the threshold that might provoke a decisive response. In one respect, however, Japan does provide an intriguing precedent in that China today has a similar dependency on

external supplies to maintain its economic growth, and, from that, its military power. Much of China’s diplomacy, foreign and internal investment is about mitigating this vulnerability.

Whether it is large scale energy deals with Russia, the building of naval bases from Sri Lanka to Djibouti via Pakistan or the rapid modernisation of the PLA Navy, it is all about

guaranteeing the supply of industrial raw materials, above all oil, to China. Indeed, the entire Belt and Road initiative can be seen as a form of strategic spread betting; what better way

to minimise dependency on vulnerable sea lines of communication than by encouraging land based infrastructure projects across Eurasia, with no tiresome complications like freedom of

navigation to get in the way? Seen in this context, China’s strategic machinations are entirely scrutable, indeed predictable, but interestingly incomplete. Incomplete because while measures

to turn the East and South China Seas into a 1.7 million square mile Chinese lake are well advanced, no such claims can be made for the Indian Ocean. It’s all very well having everything

east of the Straits of Malacca tied up by artificially constructed islands, a 200-mile economic exclusion zone and an Anti-Access/Area Denial strategy designed to dominate the Western

Pacific sea area by land based weapon systems, but it’s not much use if two strategic peer competitors, India and America, continue to cosy up to each other and the untrammelled power of the

US Navy dominates the seaspace between the Arabian Gulf and Singapore. Even Britain gets a shout, as the island base and sovereign territory of Diego Garcia is perfectly placed to interdict

Chinese sea lines of communication, a fact reflected in the price America is willing to pay for basing rights. Chinese maritime strategy remains a work in progress, and, until it develops

into full Two Ocean form – covering both the Pacific and Indian Oceans – it will not be a guarantee of national security. That will be a process measured in decades, the same decades it will

take to build Belt and Road infrastructure and in which oil will still be king. The year 2050 looms large in the climate change prospectus; it will also be the target date marked by the

Central Committee of the Chinese Communist Party to achieve full strategic autonomy. This piece barely scrapes the surface implied by its title. Beyond the Great Powers, what impact will War

and Oil have on smaller players? The Middle East has caused enough strategic disruption on the economic way up, how much more will it cause on the way down? Neither Nigeria nor Venezuela is

a pretty sight with an oil industry, how will they look without one? What if the West didn’t have to dirty its hands by being friends with Saudi Arabia? The rhetorical questions are endless

and set the scene, conveniently, for another article.