Hartshorn takes one of the most complex subjects on the face of the earth and dispatches it with grace and insight. Oil Trade covers a gamut of issues, from oil exploration to investment to consumption, but two matters stand out by virtue of their originality and their vast implications.

First, Hartshorn argues that the Seven Sisters and the Texas Railroad Commission administered prices much better than do the OPEC states. You didn’t see Exxon and Mobil hurling abuses across a conference table when they ran the show; all intent on making money, they succeeded quietly and effectively in carving up the market. But OPEC states, as sovereign and political entities, could not do this (think of Iraq and Kuwait). Failing to cooperate, OPEC lost control of the market. Hartshorn’s argument suggests that in the long term, the consumer gains from OPEC’s nationalization of its oil industries in the 1970s-certainly not the way it appeared then.

Secondly, he emphasizes the “central paradox” of the oil business: consumers are racing through the high-cost oil (in places like the United States) and avoiding the low-cost oil (in the Persian Gulf). Implicitly, everyone who invests in producing energy outside the Persian Gulf gambles that the Saudis, Kuwaitis, and others will continue not to flood the market with hugh amounts of inexpensive oil. If they did, their oil would drive everyone else’s out. Hartshorn sees this situation rendering prices inherently precarious, but thinks the gamble a good one, for the Saudis et al. have little incentive to overturn the apple cart.