Middle East Oil Dependence and stability

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Middle East OilDependence and stability

• IEPE/IFE Seminar 2 Oct 2000
• John V. Mitchell

John V Mitchell Oct 2000
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Outline

• Nature of the problem
• The frontiers of dependence
• Exterior view
• Interior view
• Nature of the solutions

John V Mitchell Oct 2000
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The problem where is the frontier between the
Middle East and the world?
Geopolitical
Economic
Social
John V Mitchell Oct 2000
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The problem where is the frontier between the
Middle East and the world?
Geopolitical
Cold war Israel Sovereignty
Economic
Social
? Middle East countries
John V Mitchell Oct 2000
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The problem where is the frontier between the
Middle East and the world?
Geopolitical
Economic
Social
John V Mitchell Oct 2000
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The problem where is the frontier between the
Middle East and the world?
Geopolitical
Economic
Social
John V Mitchell Oct 2000
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Each country strikes a different balance
Geopolitical
Protected by US
Economic
Social
Trade and technology
Isolates own culture
Saudi Arabia
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World dependence on Middle East
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Share of 38mmbd capacity expansion 2000-20
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NET FUEL EXPORTS AS OF NON-FUEL IMPORTS ()
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Saudi Arabia from low to high absorber
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OIL RESERVES VERSUS POPULATION 1997-8
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The impossible cartel
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Summary of the oil dimensions

• Middle East is important but not dominant in
  world oil supply
• World oil market dominates Middle East economies
• Cartel less likely than competition(except in
  extremis)

John V Mitchell Oct 2000
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Geopolitical connections

• Cold war policy without ideology
• Israel-Palestine remains a problem
• Sovereignty is at risk

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Social disconnections

• Governance ( transparency, democracy)
• Human rights ( womens rights)
• Religious protection - aggression

John V Mitchell Oct 2000
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What are the risks and to whom ?

• State failure
• Domestic change
• Political sanctions ( which way?)

John V Mitchell Oct 2000
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The paradoxes of generalisation

• Each country has different project for its
  frontiers
• The US has a project for the Middle East
• Europe has patchwork policies

John V Mitchell Oct 2000