Why are some parts of the world oil-rich than others?

“By 1976 virtually every other major producer in the mid-East, Africa, Asia, and Latin America had followed nationalizing at least some of its producers to gain either a share of participation or to take over the entire industry and employ the international companies on a contractual basis.”

High oil prices, on the other hand, raise the bargaining power of oil-producing countries. As a result, some say that countries are more likely to nationalize their oil supplies during times of high oil prices. However, nationalization can come with various costs and it is often questioned why a government would respond to an oil price increase with nationalization rather than by imposing higher taxes. Contract theory provides reasoning against nationalization.

The new, independent companies disturbed the equilibrium between the major companies and the producing countries. Countries became aware of their options as these companies offered better agreement terms.[8]