Oil is not the only source of conflict in the Middle East. However, this hydrocarbon plays an important part in the rivalry of the countries of this specific region of the world. By the way, how is oil doing in the Middle East?
Oil, a way of exerting pressure
A significan part of the world's oil reserves are located in the Persian Gulf, including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Iran. As a result, these countries dominated the market for a long time during the mid-twentieth century.
Thus, many oil companies have been brought into service in these nations. In addition, the United States have maintained a good relationship with these oil leaders to maintain their hydrocarbon supply.
Nevertheless, this raw material has become a weapon for the Middle East. Despite the alliance between the US and the oil leaders, some producing countries have renegotiated their contracts. For example, organizations, including OPEC and OPAEP, have put pressure on Western oil companies. Thus, during the Yom Kippur War, these organizations instituted an oil embargo. This embargo then caused the first oil shock.
Oil, a source of conflict
Despite its significant profitability, oil is a source of weakness for the Middle East countries. In addition, oil as the main raw material allows you to get rich quickly. Thus, these nations are totally devoid of economic policies to ensure sustainable development. Worse still, this source of energy has favored corruption and the intoxication of consumption. These vices have therefore undermined the alliance between these producing countries.
Thus, conflicts eventually emerged, in this case the wars between Iran and Iraq and Kuwait and Iraq. Of course, these oppositions have shaken, if not removed, the links between the countries of the Middle East. In addition, oil remains an exhaustible resource. Sooner or later, these producers will have to deal with an end of the stock reserves. This exhaustion could have serious consequences, particularly for the economy of the producing countries.
Middle East oil faces new energy sources
Observers have long feared a run out of reserves. Nevertheless, the evolution of extraction techniques has given rise to shale oil. Other sources of energy, in this case, renewable energies and nuclear energy have also emerged. Moreover, some nations are turning to these energies for their quality. This is the case of Tunisia where the country's major player, Tarek Bouchamaoui, encourages the use of solar energy.
Confronted with these sources of energy, the Middle East can no longer use a way of exerting pressure. On the other hand, other nations are still conducive to oil production. Egypt has a strong energy potential and is opening its doors to oil companies, including HBS International. Led by Tunisian businessman Tarek Bouchamaoui, HBS International signed a contract for an oil exploration agreement with the Egyptian government.