gallagher essay 3 middle eastern oil

8/13/2019 Gallagher Essay 3 Middle Eastern Oil

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How does oil play arole in the Middle

East?Colby Rheault

Emily Gallagher

COR 330-12 Essay 3


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Domestic Impacts


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Domestic ImpactsO Oil leads to unequal distribution of wealth

within oil-rich countries.

O Oil profits bring wealth to the country butit is only distributed to the wealthy,

resulting in inflated currency

O The middle and lower classes are seeing

the blow back with increased food priceswithout increased pay for their work


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What can oil-wealthy

countries do with the money?O Improve healthcare and education

O Build strong militaries

O Buy political influenceO Fund terrorist groups

O Create nuclear programs


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Foreign Impacts


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Formation of OPECO Prior to World War II, oil was controlled by the

Seven Sisters

O

1951 Iran crisis - led to 50/50 deal withMiddle Eastern countries and foreign oil

companies

O After USSR enters the oil market Seven

Sisters make uni-lateral price cuts in 1959

O 1960 OPEC foundedO countries include Iran, Iraq, Saudi Arabia,

Kuwait, Venezuela


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Foreign ImpactsO 66% of the worlds oil lies in OPEC

countries

O OPEC together has a very powerfulinfluence in the global market

O OPEC members cooperate to determine

and control supply, which effects global

markets


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Foreign ImpactsO As countries around the world have

developed their demand for oil has

increased as wellO The formation of the middle class led to

increase in car production and increased

demand for oil


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Foreign ImpactsO Oil gives countries the upper hand in

negotiating

O They can use oil as a negotiating toolespecially in means of securing imported

food and water

O Middle Eastern countries also use money

to buy government influences across theworld


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US embargo on Iranian OilO One example of how crisis in the Middle East

have effects both domestically and overseas

O

1973

Saudi Arabia cuts off United Statesfrom their oil due to the US support of Israel

O Many oil companies agree to end their supply

to US in fear of losing Saudi Arabia

O Iran auctioned off their oil to the highest

bidder, the US

O 1979Iranian Revolution leads to US

Embargo


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For the futureO Advances in solar, wind and plant based energies may

soon challenge oil demands

O OPEC members have recognized this and have been

planning to incorporate and establish sustainable

energies

O The Middle East has favorable conditions for renewable

sources due to their sun exposure and desert winds

O Saudi Arabia is already working with the GCC to buildsixteen nuclear reactors, which will produce half of the

power used by the country when it is completed in 2032

gallagher essay 3 middle eastern oil

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