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Who gets what from Middle East Oil?
The Middle East countries are a boon to all the developed and developing countries because they possess the necessary wealth required by all countries, the Oil. Many of the world’s reserves are possessed by the Middle East. It is assumed by the other countries that the Middle East oil producers must obtain the maximum possible price for producing the oil and gain control on this industry. There are many countries that benefit from the production of the Middle East oil, like the Syria and Egypt receive the payments for the pipeline crossings, and the people of countries like Morocco, Lebanon, Algeria and Syria to name a few receive benefits as they are employed in the oil industries. Though the Middle East is the largest producer of oil, it is disappointing to know that the Middle East has recorded the lowest growth rate in real GDP per capita in the last decades.
The United States, Japan and Western Europe were never too dependent on the Middle East for the energy sources; however United States saw a dependency on the Middle East to supply the civilian and military energy needs. Iran was once considered as the major oil producer in the world, but Saudi Arabia emerged as the Middle East largest oil producer after a long competition with the other Middle East countries. In terms of proven oil reserves, the Middle East oil exporters own equivocally the largest share of world’s total reserves, and by the end of 2003 the 6 countries namely Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and UAE controlled 62.5% of the world’s oil reserves (Aksari 55).
Even though many countries have advanced economically in fulfilling their energy needs because of the Middle East, the economic development of the oil producing nations has not been on par with the developed countries. For any country to be economic powerful the Foreign Direct Investment (FDI) must be enhanced with domestic investment. A country can generate employment and income if the investments in the country are well utilized. (Askari, 200) states that Middle East countries lag significantly behind and much of this is disparate, with Qatar, the UAE and Saudi Arabia commanding the lion’s share of FDI inflows (largely in oil, gas and petrochemicals sectors) in the Middle East Oil Exporters (MEOE) region.
The oil in the Middle East has been discovered in the twentieth century, but the western countries have always been behind the eastern countries to occupy a major share. The political leadership in the Middle East needs the expertise of the western countries in its domestic affairs. The Organization of the Petroleum Exporting Countries (OPEC) raised the oil prices to seize control from the western countries on the oil produced by Middle East. The best example is provided by Craig Jackson where he mentions that in 1988 the UK signed a deal with Saudi Arabia involving the sale of 72 Tornado fighters and 50 Hawk jet trainers, the construction of two airbases and a host of other equipment, training and spares [20] and this was to be paid for with 600,000 barrels of oil per day (e-ir.info).
The Middle East countries are increasing their military expenditures by their oil revenues, though it might result in damaging their regional morality. Military expenditures have drained badly needed resources, and conflicts and wars have more than negated the potentially benefit impact of oil revenues for some countries (Aksari 305). The possibility of an increase in conflicts between United States and China is likely as China is intervening in the Middle East. The economic progress or the political improvement of the Middle East cannot be guaranteed only by having oil reserves. The country’s legislative policies are vital in safeguarding and stabilizing the country’s economy. Though, the Middle East countries are the largest oil exporters to the global economy, these countries must learn to trade among themselves to understand the oil exporting strategies.
Works Cited
Askari, Hossein., Middle East Oil Exporters: What Happened to Economic Development?. illustrated, Edward Elgar Publishing. 2006. Print.
“Have Oil Reserves in the Middle East Created Economic Modernisation and Political Stagnation?” e-ir.info. e-International Relations, 28 March. 2012. Web. 05 February. 2013.
