The political economy of NOCs

The Economist runs a good backgrounder (subscriber only) on national oil companies (NOCs) and their various organizational pathologies. In particular, the article identifies the central peculiarity of nationalized energy companies — inefficiences now give them greater market leverage in the future. If nothing else, the story places “big oil” in the proper perspective: Exxon Mobil ...

By , a professor of international politics at the Fletcher School at Tufts University and the author of The Ideas Industry.

The Economist runs a good backgrounder (subscriber only) on national oil companies (NOCs) and their various organizational pathologies. In particular, the article identifies the central peculiarity of nationalized energy companies -- inefficiences now give them greater market leverage in the future. If nothing else, the story places "big oil" in the proper perspective: Exxon Mobil is the world's most valuable listed company, with a market capitalisation of $412 billion. But if you compare oil companies by how much they have left in the ground, the American giant ranks a lowly fourteenth. All 13 of the oil firms that outshadow it are national oil companies (NOCs): partially or wholly state-owned firms through which governments retain the profits from oil production.

The Economist runs a good backgrounder (subscriber only) on national oil companies (NOCs) and their various organizational pathologies. In particular, the article identifies the central peculiarity of nationalized energy companies — inefficiences now give them greater market leverage in the future. If nothing else, the story places “big oil” in the proper perspective:

Exxon Mobil is the world’s most valuable listed company, with a market capitalisation of $412 billion. But if you compare oil companies by how much they have left in the ground, the American giant ranks a lowly fourteenth. All 13 of the oil firms that outshadow it are national oil companies (NOCs): partially or wholly state-owned firms through which governments retain the profits from oil production.

Daniel W. Drezner is a professor of international politics at the Fletcher School at Tufts University and the author of The Ideas Industry. Twitter: @dandrezner

More from Foreign Policy

An illustration shows the Statue of Liberty holding a torch with other hands alongside hers as she lifts the flame, also resembling laurel, into place on the edge of the United Nations laurel logo.
An illustration shows the Statue of Liberty holding a torch with other hands alongside hers as she lifts the flame, also resembling laurel, into place on the edge of the United Nations laurel logo.

A New Multilateralism

How the United States can rejuvenate the global institutions it created.

A view from the cockpit shows backlit control panels and two pilots inside a KC-130J aerial refueler en route from Williamtown to Darwin as the sun sets on the horizon.
A view from the cockpit shows backlit control panels and two pilots inside a KC-130J aerial refueler en route from Williamtown to Darwin as the sun sets on the horizon.

America Prepares for a Pacific War With China It Doesn’t Want

Embedded with U.S. forces in the Pacific, I saw the dilemmas of deterrence firsthand.

Chinese Foreign Minister Wang Yi, seen in a suit and tie and in profile, walks outside the venue at the Belt and Road Forum for International Cooperation. Behind him is a sculptural tree in a larger planter that appears to be leaning away from him.
Chinese Foreign Minister Wang Yi, seen in a suit and tie and in profile, walks outside the venue at the Belt and Road Forum for International Cooperation. Behind him is a sculptural tree in a larger planter that appears to be leaning away from him.

The Endless Frustration of Chinese Diplomacy

Beijing’s representatives are always scared they could be the next to vanish.

Turkey's President Recep Tayyip Erdogan welcomes Crown Prince of Saudi Arabia Mohammed bin Salman during an official ceremony at the Presidential Complex in Ankara, on June 22, 2022.
Turkey's President Recep Tayyip Erdogan welcomes Crown Prince of Saudi Arabia Mohammed bin Salman during an official ceremony at the Presidential Complex in Ankara, on June 22, 2022.

The End of America’s Middle East

The region’s four major countries have all forfeited Washington’s trust.