1. Negotiating for Oil – Who will Profit?  Left Side: Warm Up Question – You are selling a car, which you know is worth about $4,000. What strategies will you use to negotiate the highest price with a potential buyer?  Right Side: use the whole page for chart. RoundTerms of Contract How much $ you have How much oil you have Reflect 1 2 3 4

2. Negotiating for Oil – Wrap Up  Create a T-Chart like the one below Our Class ExperienceThe History of Oil in the Middle East

3. Oil Simulation Notes  Pairs representing ME countries needed money  Pairs representing WC needed oil  Students made first concession agreements w/out knowing where oil would be discovered  Many ME gov’ts were bankrupt in the late 1800s  Use of oil-powered machines increased after WWI  WC & ME made oil concessions w/out knowing if oil would be discovered Our Class ExperienceHistory of Oil in Middle East

4. Oil Simulation Notes  Round 1-students gave up all oil tokens after oil was discovered  Round 2-signed new 50/50 concessions  Round 4- some signed charter agreeing to sell oil at a fixed price  Early oil concessions forced ME to give WC complete rights to all oil discovered  Arab Nationalism in 1950s led to better concession deal for ME  OPEC formed in 1960 in response to WC attempts to cut oil prices Our Class ExperienceHistory of Oil in Middle East

5. Oil Simulation Notes  Students paid more for oil in later rounds  Students that didn’t sign the charter competed w/ charter members for money  Some charter members sold oil for less than the agreed-upon price  Starting in early 1070s WC had to pay higher prices  Competition in oil market increased in 1980s due to increased oil supply & lessened oil demand  Some OPEC members broke their agreement selling oil at lower prices & exceeding their production quotas Our Class ExperienceHistory of Oil in Middle East

6. CountryRound 1Round 2Round 3Round 4 Aibara Nari Nemey Niarhab Qari Rataq Rime Tiawuk