1. The Natural Resources of the Middle East

3. Oil Economy oil dominated industry
Petroleum- remains of plants & animals, formed from pressure & heat over millions of years.
Oil is not in big pools under the ground, it is trapped in the pores of rocks.
Taken out of ground by pressure

4. Crude Oil- unprocessed petroleum
Refinery- converts crude oil into useful products like gasoline & kerosene

5. Oil Reserves vs. Economy
The Southwest Asian countries with the largest reserves of natural gas and oil are:
Saudi Arabia
Iran
Iraq
Kuwait
These countries have seen tremendous growth in national wealth and an improved standard of living in the past 50 years.
Some other countries have smaller reserves, especially around the Arabian Gulf.
Those countries without the reserves have had a much harder time improving living conditions for their people.
This difference has lead to much conflict.

6. Saudi Arabia Have a proven 200 year reserve.
The Saudi Government could purchase the entire National Football League (contracts, salaries, stadiums, etc.) with 6 weeks of their oil reserves.

7. Reserves
Until the Gulf War, Kuwait had a 21 billion- barrel proven reserve.
Iraq has a 7 billion barrel proven reserve.

8. Kuwait: An Island Floating on a Sea of Oil
Kuwait City

9. Saudi Oil Fields & Refineries

10. Oil

11. Importance of Oil
Oil is one of the most important and valuable natural resources in the Middle East.
Oil and natural gas are considered fossil fuels which means they were created centuries ago.
They are also non-renewable natural resources which means they cannot be replaced
Most of the world’s industrial nations depend on a steady supply of both resources
The US imports over half of its supply, almost 18 million barrels every day.

12. Oil Transport

13. How are oil and gas transported?

14. Saudi Pipeline

15. Oil Tanker (Knock Nevis)

16. Effects of Oil

17. However, oil has also been a source of conflict.
Regional Issues
Over the last few decades, major conflicts have erupted in the Middle East. Issues that have contributed to the conflicts include the presence of huge oil reserves, the growth of Islamism, and the conflict between Israel and its neighbors.
About two-thirds of world’s known oil reserved located in Middle East
Reserves have been great source of wealth for Saudi Arabia, Iran, Iraq, Kuwait, other countries
Most members of Organization of Petroleum Exporting Countries
Oil in the Middle East
OPEC attempts to regulate production of oil exports to maximize revenues
Oil revenues allowed Middle East governments to modernize countries, promote industrialization, economic, social development
Oil Revenues
However, oil has also been a source of conflict.

18. Oil as source of conflict in Middle East
Importance of Oil
Oil as source of conflict in Middle East
Some governments have used oil revenues to build up military, maintain power, threaten neighbors
Oil wealth has caused internal clashes within countries, societies
Region’s strategic importance as source of oil has led outside nations to become involved in Middle Eastern affairs, politics

19. The Oil Curse The “Resource Curse”
Prone to authoritarian rule, slow growth, corruption and conflict.
Resources used to finance armies, corruption and patronage.
Oil is a good example.
Modernization
High incomes.
Industrialization.
Regional and national disparities (oil wealth distribution).
Migration
Brought populations from outside the realm.
Foreign incursions

20. What is done with Oil Wealth?
Oil rich nations typically provide healthcare and improved schooling.
However those segments of the population not employed in the oil industry tend to have lower standards of living.
Girls school in Saudi Arabia
Bedouin in S.Arabia

21. Oil Pollution
Oil is the basis of most of the economy of the Middle East, but pollution from the oil industry is one of the biggest threats to its environment.
This pollution endangers the water supply in particular.
Since there is not much fresh water in the region, these environmental problems directly affect the lives of Middle Easterners.

22. Persian Gulf War Over Oil
Much of the oil refining machinery in Iraq was badly damaged in the Persian Gulf War, in 1991.
The Iraqi government did not repair the equipment that makes refining oil safer for the environment.
For years, pollution from Iraqi oil refineries leaked into the water supply and in the air.
Today, the Iraqi oil industry is not productive because of the current war in Iraq.
However, many of Iraq’s oil refineries were destroyed and burned during the war, so that the air was polluted.

23. Oil Pollution
For years, pollution from Iraqi oil refineries leaked into the water supply and in the air.
Today, the Iraqi oil industry is not productive because of the current war in Iraq.
However, many of Iraq’s oil refineries were destroyed and burned during the war, so that the air was polluted.

24. Oil in War
During the first Gulf War, Iraq used pollution as a strategy for fighting.
Iraqi soldiers dumped over 300 gallons of oil into the Persian Gulf.
They also burned hundreds of oil wells in order to keep the U.S. from taking control of their oil industry.

25. OPEC

26. OPEC
In 1960, Venezuela, Iran, Iraq, Kuwait, and Saudi Arabia founded OPEC (Organization of Petroleum Exporting Countries) in an effort to dictate oil prices.
Later additions included Algeria, Ecuador, Nigeria, Gabon, Indonesia, United Arab Emirates, Qatar, and Libya.
This 13-member cartel was designed to control world pricing and production of a single commodity, oil.
Currently, OPEC has 11 members after the withdrawal of Ecuador and Gabon.

27. OPEC

28. Top Five Oil Producing Countries: -Saudi Arabia -Iraq. -Kuwait
Top Five Oil Producing Countries: -Saudi Arabia -Iraq -Kuwait -Iran -United Arab Emirates

29. Top Oil Consuming Countries -United States -Russia
Top Oil Consuming Countries -United States -Russia -Japan -Germany -China

30. Where America gets Oil