1. Middle East after WWII
May 3, 2010

2. Demand for oil after WWII HIGH
U.S. & Soviet Union exit WWII superpowers
Cold War
Democracy (U.S.) vs. Communism (USSR)
U.S. & USSR compete for control of Middle East
BOTH supplied $$$ aid & weapons
U.S.: aid countries so they WON’T turn communist
USSR: aid countries so they WILL turn communist

3. U.S. fears: Weapons & Extremist groups Causes of Extremism:
After Cold War (1989)
Concern over weapons in Middle East
Iran, Iraq, Israel
Nuclear weapons
Chemical/ biological weapons
U.S. fears: Weapons & Extremist groups
Causes of Extremism:
Lack of democracy
Turn to violence to oppose oppressive gov’t
2. Poverty/ social inequality
Civil Wars
Anger over westernization
Hate laws, women’s rights, fashion, media

4. GOAL: end power of western oil companies over oil prices
OPEC
Organization of Petroleum Exporting Counties
11 oil-producing countries
GOAL: end power of western oil companies over oil prices
How much oil to produce
How much to sell at
POWER
Oil prices affect EVERYTHING
Law of Supply & Demand
Supply HIGH – Demand LOW
Charge LESS
Supply LOW – Demand HIGH
Charge MORE

5. But…Don’t want to cut supply
Raise prices???
Cut supply
But…Don’t want to cut supply
Not a lot to sell
LESS $$$
No OPEC
Mexico/ Russia
OPEC Losing Power
1980s – 1990s
Iran-Iraq War
Persian Gulf War
Main Issue: OIL

6. 1980: Iraq invade Iran (border disputes)
Iran-Iraq War
1980: Iraq invade Iran (border disputes)
8 years
Million deaths
Destroyed everything BOTH sides
1988: Cease-Fire
Still don’t like
Still no peace agreement
Persian Gulf War
Dictator: Saddam Hussein
Debt & want more OIL
Invade Kuwait 1990
U.S. troops to Saudi Arabia (presence – no fighting)
Operation Desert Storm
Air raid
Iraq surrender
Leave Kuwait
Hussein still allowed to be dictator of Iraq