1. Review: Oil in the Middle East

2. 1. Why was the Middle East’s location so important to European nations in the nineteenth century? Trade routes Strategic military locations Raw materials (oil)

3. 2. What is an oil concession? Giving up the rights to oil resources in exchange for money

4. 3. Why was Persia so willing to sign an oil concession? In need of money

5. 4. Why did demand for oil grow in Europe and America? WWI oil-powered ships, planes, and vehicles Increase in automobile sales in the U.S.

6. 5. What was the “Big Seven”? Western oil companies: – Exxon – Gulf – Etc.

7. 6. When did Middle Easterners gain greater control over their governments and resources? 1950s

8. 7. What country’s oil concession showed the Middle East that it was possible to create more equal oil concessions? Venezuela

9. 8. What does OPEC stand for? Why was it formed? Organization for Petroleum Exporting Countries Formed to gain greater control of production and price of their oil

10. 9. What significant event occurred in 1973? What impact did it have? World demand for oil > supply of oil U.S. supports Israel in 1973 Arab-Israeli War OPEC declares oil embargo against U.S.

11. 10. What is an embargo? Ban on trade with U.S. Oil supplies reduced 1-2 hour lines for oil

12. 11. What factors led to OPEC’s decline in the 1980s? (Name two) Non-OPEC country oil production increased Conservation effort, so demand decreased Agreed to sell at same price, then broke agreements