Download presentation
Presentation is loading. Please wait.
Published byMaud Sherman Modified over 9 years ago
1
Oil Economics in the Middle East
2
Executive Summary Discovery of Oil If It Runs, It Runs on Oil Co-reliance: Finding a Delicate Balance Economic Failures Petroleum 101
3
Introduction 1.Only a handful of Middle Eastern nations have large oil reserves 2.This PowerPoint explains oil and its role in Middle Eastern and the worlds’ economies
4
A. Discovery of Oil in the Middle East 1.In 1904, oil was discovered in Iraq; in 1914, the Iraq Petroleum Company was founded ☻☻ a.In 1908, the Anglo-Persian oil company discovered oil in Iran b.By the end of WWI (1914-1918), world leaders knew that oil would take center stage in world politics moving forward. Why? 2.In 1928, oil was discovered in Bahrain 3.In 1938, major oil fields were discovered in both Kuwait and Saudi Arabia ☻☻ 4.Bottom Line: some Middle Eastern nations now have a chip in the big game. ☻☻ *What does this mean?
5
B. If It Runs, It Runs on Oil *Why are we dependent on oil? 1.Food a.Tilling and planting b.Harvesting c.Transporting to market d.¥¥ 2.Heating √√ 3.National Security ☻☻
6
B.If It Runs, It Runs on Oil continued 4.Petroleum-based products *By the way, petroleum is basically another name for oil (more later) a.Plastics b.Asphalt c.Perfume d.Chemical fertilizers e.√√ 5.Products and their transportation 6.Transportation (cars, rail, air, ship, et cetera) 7.Travel and entertainment industry 8.☻☻ 9.More parity between Middle East and Europe & U.S. *Next PageNext Page
8
Kellogg’s plant to make Fruit Loops Return
25
C.Co-reliance: Finding a Delicate Balance 1.Today, Europe and the U.S. are heavily dependent on the Middle East for oil ☻☻ 2.Likewise, the Middle East is dependent on the U.S. and Europe to buy oil☻☻ Needs to buy oilNeeds to sell oil
26
C.Co-reliance: Finding a Delicate Balance continued 3.Oil prices need to be stable in order for the relationship to stay in balance a.Prices get too high 1)ME benefits for awhile 2)US and world economy drops b.Prices get too low 1)US and world economy rises 2)ME loses important oil revenue c.Sometimes politics gets in the way of the balance 1)9/11 hijackers (many were Saudis) ☻☻ 2)U.S. / Israeli relationship ☻☻
27
D.The Tables Turn: OPEC 1.The seven sisters (Exxon, Mobil, Chevron, Texaco, Gulf, BP, and Shell) were constantly playing one country off of another *What does this mean? 2.OPEC a.In order to get top dollar, oil-producing nations formed a cartel to control pricing Organization of the Petroleum Exporting Countries b.In 1960, Saudi Arabia, Iran, Iraq, Kuwait, Qatar, Indonesia, Libya, the U.A.E., Algeria, Venezuela, and Nigeria formed the Organization of the Petroleum Exporting Countries (OPEC) ☻☻ c.Negotiated with oil companies as one voice, not eleven d.Headquartered in Vienna, Austria
28
D.The Tables Turn: OPEC 3.Using oil as a weapon Embargo: * Embargo: officially sanctioned withholding of something; in this case oil a.1973: Arab Oil Embargo 1)Syria and Egypt invade Israel 2)U.S., Europe, and Japan support Israel with military supplies and money 3)OPEC’s Arab members, OAPEC, cut off oil supplies to the aforementioned areas 4)The result ☻☻
29
D.The Tables Turn: OPEC b.Iran-Iraq War (1980-1988) 1)Two OPEC countries 2)Supply disruptions a)Less supply, higher price b)More supply, lower price 3)☻☻
30
E.Economic Failures 1.Failed Strategies a.Have failed to diversify 1)If oil market tanks, whole economies, and countries, will go with it 2)UAE is trying to be an exception ☻☻ b.Attempt to “buy-off” populations
31
2.Failure to modernize 3.Population growth 4.Unequal distribution of wealth and resources *What makes this so important? The End
32
Return
34
Per Capita GDP Egypt = $5,000 per person Saudi Arabia = $19,800 per person Israel = $26,600 per person UAE = $36,000 per person
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.