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As the vast oil reserves were discovered, the economy or group of economies experienced significant changes in various macro-economic aspects (Tétreault).
From business point of view, oil is not only a fuel but also an object for trade. Many authors and academicians agreed that it a very important source of foreign exchange and contributor to economic development. Middle East’s aggregate oil reserves are accountable for approximately 66% of total oil supply in the world. Monopoly in oil industry has resulted in wealth creation at a rapid pace in majority of countries in the region. Apart from the vast reserves, another reason behind oil monopoly of Middle Eastern (ME) countries is that these countries have been a great support to the world economy during major oil and energy crisis in 1979-81 and 1985-86. However, the oil industry is also a reason of economic misery in the ME region, it has resulted in power intervention, political corruption and militarization (Tétreault; Toft 7265-7274).
Oil is considered as a resource of paramount importance in domestic as well as international economic and political environment from importers’ as well as exporters’ point of view. While oil is the main source of economic development and global recognition for ME countries, the ME economy does suffer from various disturbances as a cost of owning the largest reserve of the lucrative resource. It was observed during the study that the oil wealth has created national economic distortion and imbalance in power and wealth distribution. Keeping in view the disadvantages of oil as a source of economic development, the paper presents arguments against the heavy dependence of ME economy on oil as a source of economic sustenance.
The primary reason behind tremendous importance of oil in the Middle East is its role in the world economy. Oil is a source of national importance not only to small developing economies but also to major developed economies such as
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This essay focuses on the economic analysis of the global oil market condition with the help of basic economic concepts, such as supply and demand. Like any good in the market, oil demand and supply are affected by several factors in the market. Any change in its demand and supply will affect its price and it will impact the state of economy.
The countries have also realized the importance of diversifying their economic strengths rather than depending on natural oil and gas. Hence, most of countries like United Arab Emirates, Saudi Arabia, and Oman etc are trying to develop their tourism sectors by bringing a number of developments.
Economic growth in the Middle East is largely due to the occurrence of oil and gas exploration as well as the ever rising prices of the oil products in the global market. Due to the increasing prices of oil, a number of countries in the region have benefited from increased national revenues.
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The supply of these resources is supposed to be controlled by the economic factors. However, other than the economic factors non-economic and political factors have also played their part in bringing unsteadiness in the oil prices. There are different developments that have affected the political economy of oil.
The two nations with rate of growth in oil use are China and India, whose joint populations account for one third of humanity. As per the U.S. Geological Study over 50 percent of the undiscovered gas and oil are concentrated in the
According to the report USA has proved greatest hunger for oil considering its earlier strategized influence and dominance of the Middle East oil reserves and elsewhere perceived to have substantial reserve of crude oil. Many countries known to produce oil especially in the Middle Eastern suffer from sluggish.