Beyond Vulnerability: Explaining State Intervention in Oil Supply in Asia-Pacific
Creators: name: Ma, Gail Yuk Fan
Publisher: name: The Australian National University
Year: 2018
Subjects: oil supply
strategic measures
intervention
Asia Pacific

description: The politics of oil will remain a central element of international economics and security for years to come despite the current falling prices. This is especially true in the Asia Pacific where oil self-sufficiency is the lowest among all regions of the world. This thesis develops a deductive vulnerability-interaction theory to answer two major research questions: (1) What explains variations in the levels of strategic oil supply measures adopted by Asian net oil importing economies between 1994 and 2013; and (2) what explains the adoption of a high level of such measures by at least some of those economies during this period? This study hypothesises that the actual level of strategic oil measures decision-makers would adopted at any given time is the result of the interaction among the economy’s oil vulnerability (OV) and three key factors: (1) The level of decision-makers’ trust that oil markets can ensure reliable and affordable oil supply to the economy; (2) the economy’s overall implementation capability of strategic supply measures; and (3) the strength of private capital versus that of state capital in the economy. According to this reasoning, strategic oil supply measures would be higher if there is higher OV; or lower level of trust in oil markets; or higher overall implementation capability; or if private capital is stronger than state capital. The vulnerability-interaction model develops here predicts the comparative levels of strategic oil supply measures adopted by two net oil importing economies at the same period or by the same economy in two distinct periods under two situations. It also specifies the results of the interaction of the explanatory variables in four cases. These include the two “extreme cases”: (1) a net oil importing economy with a low OV, high trust, low capability, and high-strength private capital would adopt a low level of strategic oil supply measures or none at all; (2) one with a high OV, low trust, high capability, and low-strength private capital would adopt a high level of such measures. Short of these “extremes,” the model further hypothesises two pathways for the adoption of a high level of strategic oil supply measures, the three-high type and the non-three-high type. This thesis conducts a preliminary assessment to test the vulnerability-interaction model with nine net oil importing economies in the Asia-Pacific, which establishes the model’s validity. This initial evaluation’s results also provide the basis for selecting two paired comparisons, India and Thailand and China and India, and one of the economies that adopted a high level of strategic oil supply measures, Taiwan, for more in-depth investigation. The study concludes that the vulnerability-interaction model compares well to the major alternative explanation of the adoption of interventionist oil supply measures – that of the Realist/geopolitical approach. Not having a high level of trust is found to be the most important a priori condition that causes net oil importing economies to adopt a high level of strategic oil supply measures.