This paper analyzes the interaction of politics and military security in global oil markets since the 1980s. We outline the historical evolution of the pricing structure that maintained a stable world oil market. We argue that the security framework underlying this pricing structure relied on a trade-off between price stability and military security that has contributed to growing instability in individual Persian Gulf countries, and the rise of Al Qaeda and similar groups. We conclude the paper with a discussion of the pros and cons of three possible policy approaches to this dilemma – a “hands-off” approach that is similar to the policy that prevailed between 1973 and 1990, a unilateral security system organized and led by the United States, and an international security framework.