Nationalizing fossil fuels can promote the use of “oil weapons.”

Another significant impact of nationalized oil operations is the use of the "oil weapon" by exporting states in order to influence the behavior of, or possibly inflict economic damage on, consumer countries. There are contemporary examples of this, such as Russia's cessation of oil exports to the Czech Republic on the day that Prague agreed to accept a U.S. radar installation on Czech territory as part of the European Ballistic Missile Defense.21 Consumer states often lack the ability to quickly change sources of oil supply due to the nature of contracts, the difficulty in shifting refinery processes to handle different grades of crude and, in periods of short supply, the dearth of spare global capacity to replace interrupted petroleum shipments. Yet, exporting states can also suffer from their own use of the oil weapon since they often depend on the revenue they obtain from their exports. If they cannot find new buyers, they must have other sources of revenue or can only afford to disrupt their exports for short periods of time.

There has been considerable debate in recent years regarding the longevity of the oil supply, with some analysts suggesting that global peak oil production has already been reached and others suggesting that it will occur at some point during this century.22 The issue of peak oil is outside of the scope of this article, although it is important to understand that the availability of adequate quantities of oil on the market reduces the impact of supply disruptions. A well-supplied market can lessen the degree and longevity of disruptions better than an inadequately supplied one. It seems logical then that states that have nationalized their oil resources might be reticent to interrupt exports for political reasons if the market is well-supplied. This is because, under this circumstance, countries whose supplies are cut will be more able to find alternative sources. However, this is not guaranteed since converting refineries to handle different crude can take some time; therefore, the impact of supply disruptions will still be felt to a limited degree, even when markets are well-supplied.