In modern times, what separates rich countries from poor is energy consumption. Even more striking is an inverse relationship: most rich countries are poor in oil, and many poor ones are rich in oil and other energy sources.

NOCs were at the vanguard in the Third World’s post-colonial emancipation in the 60s and early 70s. Nationalizations were potent political actions rich in symbolism: multinational oil companies were the most blatant examples of European and American colonialism and imperialism. But cooperation between the indigenous and the imperialist was unavoidable; if nothing else, the newly minted companies needed the technology of their recently ejected masters.

It was the Arab oil embargo of 1973 that first used the producers’ oil as a weapon to further a political aim. The embargo ushered in an era of serious conflict and the establishment of OPEC as a hugely powerful cartel. Unprecedented oil price increases led to a sudden shift of wealth that the world had never seen before and may never see again.

Caracas, Jakarta, Lagos, and assorted Arab sheikdoms were flush with money – often grossly mismanaged – and the ostentatious luxuries and lifestyles the money bought are still the stuff of legend.

The ride lasted for about a decade and came to a dead-end with the Cold War. U.S. president Ronald Reagan, in an attempt to bring the oil-export dependent Soviet Union to its knees, convinced Saudi Arabia to flood the market with oil. Oil prices collapsed and the effects of the “crisis” in almost all oil-producing countries have lasted to this day. The situation certainly brought down the Soviet Union.

A decade later, with OPEC toothless and desperate for technology and cash, many NOCs opened up to the multinationals again, in “joint ventures,” alliances, and outright concessions. “Apertura” (opening) became the buzz-word in Venezuela, and served as a fig leaf over the reality of the time. Many thought that a new era of cooperation between producers and users was coming.

Not so. By 2000, the inexorable physics of increasing demand, coupled with a practical lack of exploration and development, resulted in the evaporation of excess production capacity. The event blindsided the developed world because of a sharp but temporary fall in oil prices that followed the 1999 collapse of several Asian financial markets.

Oil prices climbed to $30 in January 2000 and have never gone back. While some NOCs, such as Petrobras, Malaysia’s Petronas, and Indonesia’s Pertamina, remained reasonably stable, others went foraging. Populist leaders emerged as energy militants, re-taking control of their most valuable asset: Hugo Chávez in Venezuela, Vladimir Putin in Russia, Evo Morales in Bolivia. NOCs became the vehicle for their political ambitions and provided the treasury to finance them. Previously privatized or opened-up NOCs were taken over in brutish ways, without even the niceties of legalese or lofty pronouncements. In short, the NOC resurrection is real.

Multinational oil companies are now virtually shut out of big reserves in many NOCs or are reduced to impotent minority players. Oil prices upwards of $70 lend a lot of bravado and strut. But as usual, that money is not managed or re-invested. Politics and social welfare reign supreme. Production is bound to decline, and infrastructure and skills will go by the wayside. Any reduction in oil prices will again bring the unavoidable crash. It’s the nature of the beast.