1. The Importance of Oil & OPEC
THE MIDDLE EAST
The Importance of
Oil & OPEC

2. An Important Question
What do you feel is the United States’ interest in the Middle East? a. oil b. protection of Israel c. humanitarian efforts d. a genuine interest in spreading democracy e. all of the above

3. OIL Oil is the most important energy source in the world today.
Oil has changed the Middle East.
Modern, wealth, armies, weapons.
Oil is a finite (exhaustible) resource
Creates a need to regulate and monitor production/distribution

4. COMMUNISM vs. DEMOCRACY
The Cold War was portrayed as a fight for Democracy and freedom.
However, one of its main goals was to make sure that communism didn’t reach the Middle East
Although there were many communist countries, the biggest concern and threat was USSR/Soviet Union.
Leaders of western countries didn’t want communism to spread to the Middle East.
Because they didn’t want the Soviet Union to gain control over the region.
They didn’t want the majority of the world’s wealth in the control of communists.

5. OPEC Organization of Petroleum Exporting Countries
In 1960, all the major oil producing countries got together to form a cartel. OPEC was founded in Baghdad, Iraq.
They wanted to control the price of oil to ensure that they could get the highest profit.
Members agree to sell oil at set prices and abide by production limits.
cartel-an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition

6. OPEC currently consists of 14 members
Algeria
Angola
Ecuador
Gabon
Indonesia
Iran
Iraq
Kuwait
Libya
Nigeria
Qatar
Saudi Arabia
United Arab Emirates
Venezuela

7. Where has all the oil gone
Where has all the oil gone? Projected life of oil reserves by country Less than 10 years
United States Argentina
Canada Australia
United Kingdom Ecuador*
Indonesia*
Norway
Egypt
*OPEC member

8. Where has all the oil gone
Where has all the oil gone? Projected life of oil reserves by country Less than 50 years
China India
Nigeria* Qatar*
Algeria* Angola*
Malaysia Romania
Colombia Yemen
Oman Brunei
*OPEC member

9. Where has all the oil gone
Where has all the oil gone? Projected life of oil reserves by country Less than 100 years
Saudi Arabia* Brazil
Russia Azerbaijan
Iran* Trinidad
Venezuela*
Mexico
Libya*
*OPEC member

10. Note: Country size is determined by world reserves of oil

12. This has been used as a political tool.
OPEC punished Western nations by not supplying any oil when they supported Israel in the 1973 Arab-Israeli wars.

13. GULF WAR
In August 1990, Iraq invaded Kuwait to keep it from selling more oil than OPEC had allowed.
The US fought in the Gulf War to protect Kuwait and its oil supply.