M ATT C A M P B E L L & B R E N DA N C A R R O L L

OIL AND THE MIDDLE EAST

MIDDLE EASTERN OIL PRODUCTION

• Accounts for 43% of oil exports

• Holds 2/3 of world oil reserves

• Saudi Arabia accounts for 37% of these reserves

• (http://www.opec.org/Publications/AB/pdf/Ab002000.pdf)

USA OIL DEPENDENCE

• 85% of all energy consumed in the US is from oil and natural gas

• 40% of which comes directly from oil

• Where do we get our oil?

YOU MAY BE SURPRISED

• USA receives 40% of its oil needs from domestic production

• We import most of our oil from Canada, about 200 million barrels annually

• 160 million barrels are imported from the Middle East, Saudi Arabia in particular

DOES IT MATTER?

• Anyone following the oil market will say one thing: No

• Right behind the Middle East, we still import a large fraction of our oil from Mexico and Venezuela

• Once refined, oil is oil

SO WHY DO WE CARE?

• As stated, the Middle East holds 2/3 of world’s oil reserves

• A possible reason why we are so interested in stabilizing politically underdeveloped regions of the Middle East?

THE “CURSE”

• With political instability comes economic volatility

• With the main export from the Middle East being a finite resource, their economy is exposed to commodity market swings

• With harsh economic times with political instability comes internal conflict

• Could this have an impact on oil production?

THINK LONG-TERM

• Oil is a finite resource that we depend on too much

• With an oil shortage crisis looming along with a known dependency on the resource comes concern with the political stability of oil producing countries

• Only one recession has occurred without a change in the price per oil

REFERENCES

• http://www.opec.org/Publications/AB/pdf/Ab002000.pdf

• http://www.theglobaleducationproject.org/mideast/info/oil.html

• http://www.npr.org/2012/04/11/150444802/where-does-america-get-oil-you-may-be-surprised

• http://www.pennenergy.com/articles/pennenergy/2013/10/a-brief-history-of-oil-prices-and-middle-east-tensions-fear-of-a-black-gold-shortage.html