U.S. policy initiatives to encourage new production have not been limited to Central Asia and the South Caucasus. The U.S. has invested considerable effort in encouraging institution building and investment-friendly legislation in Russia to promote petroleum development there as well as a host of similarly modest efforts in Latin America and Africa. From the perspective of the major oil importing countries, such a large concentration of low cost reserves presents two kinds of vulnerabilities or risks. The first vulnerability stems from the possibility that a relatively small number of producers could restrict output to the world market, and as a result, charge prices over the long term that are substantially higher than those which would prevail in more competitive markets. One could argue that restricting output and achieving higher prices is in fact the very purpose of OPEC, although, until the 1999 price recovery, the organization had not been very effective at achieving this since the late 1970's.
Higher prices result in wealth transfers from consuming countries to producing countries.
Of course, the reverse trend occurs when prices move downward. An important consequence of the 1973-74 Arab oil embargo was a structural shift in the ownership and control of the vast Gulf resources. By changing expectations on future production levels of the major Middle East oil producers, the 1973-74 Arab oil embargo brought about a sustained increase in the value of oil. As Middle East reserves were nationalized and transferred to the control of the host countries, expectations for future production from the region were scaled back and prices responded accordingly. The so-called second oil price shock in 1979 can be seen in a similar light, as the Iranian Revolution sent a signal that the region was in for a period of instability.