The Middle-East and the Demand for Oil

The Middle East region is made up of Egypt and southwestern Asia. The countries in the region include Armenia, Azerbaijan, Bahrain, Georgia, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, Turkmenistan, United Arab Emirates and Yemen. However in some cases, the term has been used to include Pakistan, Afghanistan and Caucasus depending on the context of use. Most countries in the Middle East are enriched with petroleum oil reserves an industry coupled with many challenges. These challenges include the impact of imperialism, war and political instability.  Political instability has led to death of people as well as economic deterioration in the affected countries.

To begin, the region has had a variety of wars. The Arab-Israel war of 1973 was a big blow to both economies. The war was born of an oil embargo on Israel and its supporters. This made OPEC to deliberately restrict supply with the sole intention of driving up oil prices. Petrol supply was rationed in the dependent countries and gas station ran out.  This in turn led to unbelievable 400% increase in oil product prices. Similarly, in the era of Iranian revolution, (1979) the oil prices hiked oil up from $US15 per barrel to nearly $US40 per barrel.

The Iraq-Kuwait war of 1990 affected both economies negatively. This was a major dispute between the Kuwait and the Republic of Iraq. Earlier on, Iraq had accused Kuwait of slant drilling which reportedly led to Kuwait stealing Iran's oil. The invasion was full of speculations as some sources claimed that Iraqi's Saddam Hussein had earlier plans to attack the State. Others felt that Iraq was not in a position to settle the $80 billion debt that it had borrowed to finance the war with Iraq was also a sparking factor of the war 2. At the end of the war, Iraq was not able to pay the money. Iran therefore chose to hike oil prices through the OPEC's oil production cuts in order to raise enough money to pay its debts, a move which was opposed by Kuwait . Kuwait in turn increased its petroleum production which led to reduction of oil prices which crippled Iraqis' economy further. Iraq then accused Kuwait of drilling oil across the border which eventually sparked the war.  The outcome of the war was a high military debt in Iraq which led to low living standards of the citizens. Ports were destroyed, oil fields were mined and the parties lost their traditional oil customers further crippling the economies. About 400,000 Kuwaitis fled the country. It was alleged that Saddam looted a big fraction of Kuwait's' wealth. Violation of human rights was also evident with Kuwait citizens been taken to Iraq never to return. Lives  were also lost. The war also led to doubling of oil prices from $US15 to $US30. This was because 4million barrels a day which were initially been released were no longer been supplied.

Other various wars have been a stumbling block to these economies. These wars include the Iraq war, the North Yemen Civil War, the aL-Anfal Campaign, the Lebanon civil war, the Turkish War and the Arab Israeli Conflict.

The Arab-Israel conflict is a political tension between Jewish community of Israel and the Arabs. This conflict was initially a nationalist and political conflict after the Ottoman Empire collapse but has with time narrowed down to a Israeli-Palestinia conflict. The war can be perceived as a harmed conflict between Israel and the Arabs which can be traced to the ancient enemity between the Muslims and the Jews ³. This is a conflict which has coasted the Nations close to $12 trillion. This has adversely affected the GPD with the average Israeli earning $23,000 contrasted with the $44,000 he/she should be earning suppose the war never existed.

The Iraq war which began in 2003 was an invasion of Iraq by multinational forces which were led by troops from the UK and the USA. These Economies claimed that Iraq was in possession of weapons of mass destruction which was a threat to peace. This war is attributable by many to America's desire to have an uninterrupted flow of oil. Thousands lost their lives. The North Yemen Civil War was fought in North Yemen. It was a war between the Mutawakkilite Kingdom of Yemen and the Yemen Arab Republic fractions. It all started with a coup d'etat which was carried out by Abdullah as-Sallal- a republican leader who declared Yemen a republic under his presidency. Both sides marshaled allies with the royalties been supported by Saudi Arabia and the republicans gaining support from the Soviet Union and Egypt. The Republicans won the war. This war further crippled development in these countries.

The Lebanon war cannot be left behind. This was a civil war in Lebanon between 1975 and 1990. The events leading to the start of the war remain unknown but it can be linked with the conflicts which erupted after the reign of Ottoman Empire. The war ended up with 130,000 to 250,000 civilian fatalities. It is also estimated that one million people were injured which is approximately a quarter of the entire population with half this number having lifetime disabilities.

The economy collapsed since thousands of dollars were destroyed, central Beirut destroyed completely, Syrian occupied Lebanon, Israeli occupied southern Lebanon and a resistance movement by Lebanon forces cropped up against the Syrians who were in Lebanon. The Turkish War of Independence was a war of independence by Turkish Nationalists against the Allies. This was after the partition of the country by the allies, after the Ottoman Empire was defeated in World War 1. This war led to Turkey emerging as the victor hence establishment of Turkey Republic.

Tribal ethnicity is also evident with the al-Anfal Campaign- a genocidal campaign marshaled against the Kurdish people in the regime of Saddam Hussein. The name is derived from the Surat al-Anfal in the Quran. This campaign was also targeting the Kurdish sub tribes of Shabaks and Yazizids. This war led to a mass execution of approximately 100,000 civilians. About 400,000 villages were destroyed and further through exposure to chemical weapons. Schools, hospitals and churches were also destroyed. Human rights were also violated with mass execution of non -combatants including women and children and chemical weapons were used which include mustard gas in the Kurdish villages killing thousands.

Alongside ethnicity and tribal wars in the Middle East is the impact of European imperialism. This is a phenomenon that started with the oversea expansion of Europe way back in the 15^th century. The Europeans have for long imposed military control in these countries, exploiting their resources in unrestricted manner and politically controlling these countries. This is all tailored to benefit these European countries with a feeling of cultural, religious and racial superiority over the dominants of these countries. The European giants have sometimes gone as far as monopolizing the local resources in order to under develop the affected country, reorienting these regions towards producing primary good mainly for the European economy and preventing the influx of mixed economies .

Imperialism in the middle east assumed different forms in the early 19^th century; direct colonization, diplomatic pressure aimed at granting economic privileges to Europeans and non Muslim as in the case of Ottoman sultan and treaties to control seaports as in the Persian Gul. A new form of European imperialism has recently emerged. A case at hand is where rulers agreed with European investors to built infrastructure, market their goods as well as operation of banks. The economies were also allowed to seek loans from the European banks. When Egypt and Iran were not in a position to repay these loans, the Europeans assumed control over the important sources of state revenue such as oil mines and customs. By so doing they controlled their oil mines as well as dictating their markets.  Iraq's oil production is limited by U.N. sanctions producing low levels than it should be producing. Iran has been subjected to US sanctions. The best example is a case in 1995 where the US restricted investment in Iran through the Iran and Libya sanctions Act that provided for operational sanctions for foreign companies which have invested more than $40 million in those countries. This has limited economic development.

A geopolitical implication of this reliance on Middle East oil is focused on how the reliance would affect regional politics, economy, global security as well as the foreign policies of nations.  Over reliance of countries on Middle East oil has affected global oil supplies, the price of oil and global oil security. This overreliance has even lead to a conflict between the Middle East and the Asia-pacific region due to a common perception that the Asian-pacific region has scarcity of energy reserves. Since the world's largest hydrocarbon reserves are in the Middle East, this geographical region is bound to play a major role in global politics as well as global economy. As the demand for oil grows, global oil security problem is bound to increase as a result of overreliance on only one source of energy located in such a volatile region. Global oil security will be compromised due to the fact that several oil reserves have been destroyed and even more would be destroyed if the volatility continues.  This overreliance is also bound to impact on the attitudes and policies of big oil consumers like U.S. towards the oil producers. Additionally, this dependence will strengthen the economies of the producing countries. Since these countries are Islam oriented, they are bound to finance terrorist networks and this will further compromise international security.   The war in the Middle East which has led to a destruction of oil reserves has also led to an increase in oil prices. For instance, the price of oil by 1974 quadrupled to $12 per barrel. This increase in oil prices has been to the advantage of Arab-oil producers. Countries like Iran have generated huge revenue from this increase which has been channeled to the subsidy of large weapons purchases further putting global security at stake. Iran has also used the revenue to support unconventional weapons programs such as the nuclear program. This in turn has resulted to cold wars between such Arab countries and Christian dominated countries such as U.S., U.K. as well as Israel . This overreliance of America on Middle East oil has also been used to black mail it to withdraw support for Israel. This clearly has made the country very vulnerable.

Conversely, this increase in oil prices has impacted negatively on the economy of the oil importers. For instance, between the years 2004-2008, the dependency cost U.S. economy about $1.9 trillion dollars as a result of price manipulation by OPEC which in turn contributed immensely to the U.S. economic recession witnessed within this period. This increase in oil prices has led to an increase in the cost of living in the U.S. U.S. reacted to this increase in oil price by printing more dollars which in turn made the dollar lose value. This caused problems such as the housing bubble in 2008 which damaged the U.S. economy. This is because the oil exporters used the money paid to them to purchase assets in the U.S. including houses. The increase in the number of printed dollars also increased liquidity since this led to increased availability of loans in the market which in turn led to questionable mortgage investments hence increasing the effects of petrol dollar recycling. U.S. was also forced to change its energy policy by decreasing her dependence on oil through increasing cooperate average fuel economy (CAFE)  Standards on new cars and trucks to 35mpg by the year 2020 which would decrease oil consumption by about 25billion gallons by 2030. U.S energy policy has also been strengthened  through the establishment of  the strategic petroleum reserve intended to take care of the Kamalipour, Yahiya. The U.S. Media and the Middle East : Image and Perception, London, Oxford University Press, 1995.

This geopolitical struggle for oil has led to strained foreign relations through the great oil consuming nations like U.S, Russia and China as they view each other as competitors. Asino-American energy was is inevitable if these countries do not come up with alternative energy sources ¹⁰. America has also engaged in several wars attributable to oil with the Iraq war being a case in point. This war is attributable by many to America's desire to have an uninterrupted flow of oil. These wars have compromised American values and national identity and have also been costly. This dependence on Middle East oil has resulted to environmental as well as economic risks for countries like U.S. and the U.K ⁹. The recent British petroleum oil spill is a case in point. This oil was in transit from the Middle East. This spill led to a devastating pollution in the gulf of Mexico. These costs the company a lot of money in clean up expenses hence a negative economic effect on the U.K. This spill put the U.S. president on the spot hence reducing his political popularity. This explains the heavy price to pay for the two countries dependence on oil from the Middle East.