Rentier Oil Economic Analysis

In our society, oil is one of the core requirements. Whether it is to drive from a point A to a point B or to fly between distant countries, oil always had a fundamental impact on our civilization. Its impact is felt, on a daily basis and under many aspects. Not a day goes by without hearing about the Brent's changing undulation, on the markets in New York or London. Some have thought that the desire to gain control of Iran's oil resources was the core of the CIA's intervention in that country, in the 1950s. In recent years, it was considered, by left-wing groups, that the war in Iraq was based upon an attempt of foreign control over the Iraqi petroleum resources. Even though both events have an unquestioned place

“There is, then, an economic basis for the absence of democracy in the Arab world. But it is structural. It has to do with the ways in which oil distorts the state, the market, the class structure, and the entire incentive structure. Particularly in an era of high global oil prices, the effects of the oil curse are relentless: Not a single one of the 23 countries that derive most of their export earnings from oil and gas is a democracy today.”

Oil has often been referred to as any economy’s lifeblood. Although this is an overemphasis, oil has been the key, nonhuman resource of the economy throughout the largest part of the 20th century. In the book “The Prize: The Epic Quest for Oil, Money, And Power” by Daniel Yergin, the author illustrates the political, societal, economic, and geo-strategic importance of this product.

The two most important resources in this region are oil and water. The huge oil “deposits there and in the neighboring countries around the Persian Gulf (the United Arab Emirates, Kuwait, and Bahrain) established these countries as some of the richest in the world” (Document F). Nevertheless, the countries who do not have as much access to oil are weak economically. Oil is the biggest export in the Middle East, and in a way, the amount of oil a country has determines how wealthy that country will be. Another component of oil is that countries and ethnic groups are disputing for the control of prices of this economic resource. It has gone to the far extent of foreign countries attempting to control the oil price and also the use of weapons for this (Document E). In addition, it is impossible for each country to have equal access to water due to the unbalanced distribution of these essential resources. As a result of this, these countries are fighting for as much control of water sources they can get. Radically, there are many countries in the Middle East that are striving to obtain as many natural resources to strengthen their economy and lifestyle, and it seems most obvious that the scarcity of these resources is a significant problem in the region

According to Diamond, oil-states can be generally defined as countries whose economies are dominated by oil. Among “the twenty-three countries whose economies are most dominated by oil today, not a single one of them is a democracy. (Diamond 74)” When oil initially becomes a large source of revenue for countries, negative effects immediately occur. One major reason for this is that when an economy is dominated by

Two-thirds of the world’s remaining oil reserves are in the Middle East which will make international policy imperative in the future (Campbell 2007). It is

The Arctic has the world’s largest unused source of oil and it is getting international attention because of its extremely value resources (Crawford, Hanson & Runnalls, 2008). According to Digman (2011) the Arctic’s commercial interest mostly rely on drilling, mining and transportation development. However, Arctic’s development not only will lead to economical profits but also will bring international conflicts. Due to this, a Sovereignty by the five Arctic’s coastal countries such as Canada, Denmark, Norway, Russia and United States is essential. Moreover, Arctic’s climate change is happening right now due to human induced factors (Isted, 2009) and Arctic’s development will lead to environmental damage (Johnston, 2012). The effects of this combination will have significant global consequences and could end in an environmental catastrophe (Crawford et al., 2008).

This economic modernization in the Middle East, could only be a short term success which does not guarantee the successful and stable economic development of oil rich states and the region as a whole in the long term. The Middle East, despite its vast reserves of oil, is still considered a developing region due to the high reliance on oil revenues and rather weak production sector of the economy as well as due to some political factors such as lack of democracy, corruption, reluctance to the reforms and other issues. There are various reasons as to why the Middle East is still considered a developing region despite its oil wealth. Natural resource revenues have also been linked to slow economic growth rates, inequality, and poverty. One culprit may be "Dutch disease," which was discussed earlier. Other factors may include the volatility associated with commodity prices, which can have especially negative impacts on weak-state economies; and the underdevelopment of agricultural and manufacturing sectors during boom periods in resource-based economies. And even when oil abundance produces high growth, it often benefits only a few corrupt elites rather than translating into higher living standards for most of the population. Corruption is one of the economic deficiencies which can weaken economic growth and development; thus it is considered as an important impediment to economic growth and political stability, particularly in developing countries. The dependence on a

The ambition of the often autocratic leaders to acquire more land, which may bring them access to oil, water or arable land. The problem according to Sørli et. al is “scarcity” and “abundance” (147). Water is scarce, and oil is in abundance, but the access to both is limited. According to our text, the new “water wars” have emerged as a major source of conflict, in addition to the “oil wars” (Anderson et. al, 226). Water is scarce in the Middle East, and will continue to dwindle as the population rises. Not every country has the same access to the water sources, which will naturally cause problems. For example, Israel has control of the Golan, and Egypt of the Nile, and Kuwait of the Persian Gulf. Oil is in abundance, but only to a limited number of countries in the Middle East causing great economic disparity between those who have, and those who do not. Kuwait, having access to the Persian Gulf, produces a large supply of oil to international players. Given its high value internationally, and its worth, oil is much sought after.

Like in many wars in history, “money,” “power,” and “oil” were the primary resources for combat and defense. However, out of the three, oil was the most important resource, causing many to seek its presence. Oil was not only for getting the engine started but also for getting the war done thoroughly and keeping the economy running. During World War II, oil became even more of a necessity putting countries at war. However, most importantly, oil became the decisive factor that determined the unfortunate and successful results of desperate, oil-seeking countries.

Oil has repeatedly been referred to as any economy’s lifeblood. Whereas this is an overemphasis, oil has been the utmost key, nonhuman resource of economy throughout the largest part of the 20th century. In the book “The Prize: The Epic Quest for Oil, Money, And Power” by Daniel Yergin, the author illustrates the political, societal, economic, and geo-strategic prominence of this product. The book was published by Simon and Schuster in 2011 in New York, and contains 928 pages, as its ISBN is 1439134839. This research paper aims to provide a book review on Daniel Yergin’s “The Prize.”

Climate change is becoming a focal point for security and conflict research. Research suggests that violent conflict is affected by climate change and this could become increasingly worse in the future. Barnett, J., Adger, W. (2007) suggest that climate change undermines human security by reducing the access to natural resources that sustain people’s way of life. Climate change also has the capacity to undermine states as well by cutting off the states ability to provide opportunities and services that help maintain life and which help to maintain and build peace in daily life. With access to natural resources diminishing and the state not being able to provide opportunities and services that help maintain life and human security this

In this text, I concern myself with the contents of two articles based on recent microeconomics issues. During the last two months, the price of gas in the U.S. has been on an upward trend. Taking into consideration recent happenings on the international scene, this trend could have been triggered by many different factors. The articles I make use of in this case discuss the rising oil and gas prices.

The oil industry can not be discussed without mentioning the name John D. Rockefeller. Rockefeller changed the business of oil distribution. In the 19th century Rockefeller began his humble beginnings with a small investment, along with two other partners, in the oil refining business. Eventually Rockefeller upset at the direction of the company bought out his partners. He was now buying into refining and developing kerosene and other petroleum-based products. He later named this company The Standard Oil Company which by 1872 nearly owned all the oil refineries in Cleveland. In 1882, Rockefeller took all his holdings and merged them into the Standard Oil Trust. Through smart business

Since the past few decades, owning a car has become a necessity in order to commute from one place to another. However, cars do not work automatically, they require fuel. Since the past decade, the petroleum industry has become one of the leading industries impacting the nation’s economy. Oil has become an essential commodity as it is utilized in transportation vehicles, serves as a raw material for manufacturing plastics, and is utilized in homes for cooking. America’s economy is greatly dependent on petroleum as it is the “black gold” of the nation. The considerable significance of oil has led to the drilling of it, which is not only limited to land, but also the oceans. Offshore drilling is a method in which petroleum is extracted from underneath the seabed. It is one of the significant technological advancements in the past few decades. However, the ones who are involved in the process of offshore oil production are humans, and humans tend to make mistakes. In 1969, due to a human error, an oil spill occurred and natural gas, oil, and mud shot up the well and oozed into the ocean (“Offshore Drilling”). The oil spilled led to an environmental disaster which killed thousands of marine animals and distorted the environment. In order to prevent the same error, the government passed a moratorium in 1981, banning more than 85 percent of the country’s oil drilling sites (“Offshore Drilling”). The moratorium restricted the United States to mass-produce its natural resource.