Brendan Carroll Matthew Campbell
Oil and the Middle East
Summary
It is no secret that the countries in the Middle East have harnessed their most
valuable natural resource, oil, in the past forty years. It has been the source of many
leaps and bounds in the development of various Middle Eastern countries,
particularly Saudi Arabia, Kuwait, and Libya. It is also no secret that countries who
import mass amounts of this precious resource place a high value upon it. One of
those countries happens to be the United States of America. In fact, the United States
consumes nearly 4 times more refined oil than they produce of crude oil. According
to theglobaleducationproject.org, the United States consumes 18,656,600 barrels of
refined oil while only producing 5,821,600 barrels of CRUDE oil. To say the least, we
really depend on the production and importation of refined oil from various
countries, and in particular the countries deriving from the Middle East.
In point of fact, the United States has become ever more dependent upon
imported or foreign oil. A mere thirty years ago, 28% of the oil consumed in the United
States was imported. Today nearly 60% of the oil utilized and consumed in the United
States is imported from other countries.
Turning to the stability of the nations from which the U.S. imports oil, a good
share of imported oil does come from nations that have fairly stable political
situations. However, as will be discussed shortly, the largest amount of oil reserves
are located in the Middle East -- one of the most volatile regions of the world. Most
people are surprised to learn that the country from which the United States imports
the greatest amount of oil is Canada. In recent years, the United States has imported
approximately 200 million barrels of crude oil annually from Canada.
Oil imports into the United States from Saudi Arabia come in at second place
with about 160 million barrels of crude oil annually from the Kingdom. The United
States imports about the same amount of oil from Mexico as it does from Saudi Arabia
on an annual basis. Other countries from which the United States imports oil are:
Venezuela, Nigeria, Iraq, the United Kingdom, Norway, Angola, Algeria and Colombia.
Of course, oil is a limited resource. The bulk of proven, remaining oil reserves
in the world today are located in the Middle East. In the Middle East there are an
estimated 727 billion barrels of oil in reserve. The amount of oil in the Middle East far
outstrips what is available anywhere else on Earth. For example, the known reserves
in Central and South America are an estimated 99 billion barrels, in Africa an
estimated 87 billion barrels, in the nations of the former Soviet Union an estimated
78 billion barrels and in Western Europe and China there is an estimated 18 billion
barrels in each location. Rounding out the list is Mexico with an estimated 16 billion
barrels of oil in reserve and India with an estimated 5 billion barrels of oil in reserve.
Oil, coal and natural gas account for more than 85% of the energy consumed
in the United States at this point in time. Oil accounts for nearly 40% of all energy
utilized in the United States in this day and age.
So we turn our attention towards the long term thought process of the U.S
government, why do we care about the political stability of the Middle Eastern
countries? We care because we know oil is a finite resource. With an unstable
government at the helm, we could see extremely volatile oil prices or even a major
decline in oil production, thus having an impact on our own economy, which could
affect the global economy as a whole given our economic size!