Middle East Summit
Management of Oil Resources
Oil, the “staple crop” of the Middle East, has been threatening to wreck havoc on an already unstable region of the world. As the price of a barrel of oil has skyrocketed in recent years, so has the GDP of the countries that have drilled it. This has propped up questionable governments, supplying governments like the monarchies of Saudi Arabia and the UAE with endless funds. In addition, the effects of burning and using oil and its products, like gasoline cause global warming and tremendously detrimental effects to the environment. Because oil is derived from the fossils of animals and plants from thousands of years ago, it is a finite resource. The rate at which we extract oil is only increasing. This naturally leads to another tremendous problem – what do we do when we run out? Governments throughout the Middle East rely on the profits they derive from oil to support their national economy and could face a potential catastrophe if we were to run out or if global demand were to decrease.
As important as oil is to the national economies of countries that export it, it is also strongly tied to the economies of countries that import it. Countries like the United States, which, in 2008, consumed about 7.14 billion barrels of oil, consume copious amounts of oil, and thus become dependent on. Being the importer of 23% of the world’s crude oil, America had to pay over 135 dollars per barrel of oil. Bearing the burden to pay for such an expensive and volatile commodity threatens the stability of the economies of many Western countries.
In addition to holding economic power over many countries, the oil producing countries also hold great political leverage. A group of nations called OPEC (Organization of the Petroleum Exporting Countries) joined together and, as one unit, control the amount of production and the price they will set per barrel of oil. This group has exercised their authority to accomplish political goals in the past. For example, in October 1973, OPEC declared an “embargo” against the United States. They refused to export oil to the United States because of their alleged support to the Israeli military. This caused a dramatic shock. Many nations, feeling as if OPEC is “holding them hostage,” have started researching alternative sources of energy. These same countries have also been involved in shady affairs with the petroleum exporting countries. The high demand for oil has thus increased tensions among certain international figures and increased “back-door deals” and, some claim, has even been the cause of certain military conflicts.
The growing demand for oil and shrinking availability present a looming disaster that requires an international effort to alleviate. The potential outcomes are numerous – countries have tried to cut oil use, but many leading countries have been slow to agree. Without a multilateral agreement, this already unstable region of the world can explode into a dangerous and violent situation without a viable solution.