Oil in the Middle East
Petroleum is the world's most important energy resource.
Industrialized nations like the United States depend on oil to power their
factories. Some nations have a great deal of petroleum reserves,
while other nations have none.
More than forty percent of the world's oil reserves are spaced unevenly
among the nations of the Middle East and North Africa. America's
relationship with the Middle East and North Africa has changed since the
discovery of oil in the region. In 1960, many of the oil producing
nations agreed to form a cartel. A cartel is an international organization
formed to regulate prices and production. The cartel, called OPEC
(Organization of Petroleum Exporting Countries), increased prices by 70%
in 1973. American gasoline prices more than doubled and people waited
for gasoline in lines sometimes over a mile long.
Oil has changed the Middle East and North Africa. Many leaders
in the region have used the wealth from oil to modernize their nations,
while others kept the wealth or used it to buy weapons and build armies.
Saddam Hussein used Iraq's oil wealth to build one of the world's strongest
armies.
Oil is a non-renewable resource, so oil-producing nations must prepare
for a time when their wealth dries up. Experts believe that we have
used about one third of the world's supply of petroleum, and that supplies
will be totally exhausted by about 2050. The world will likely prepare
for the exhaustion of petroleum reserves by switching to other sources
of energy. Bahrain is a small nation in the Persian Gulf that used
its oil wealth to develop a diversified economy. Today Bahrain has
little oil left, but it is a commercial and financial center and Bahrain's
refineries process oil from other nations in the region.
You may use the information above and pg. 431-433 in your textbook to
answer these questions.
1. Why is oil so valuable to so many countries like the United States?_______________
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2. How can oil reserves benefit the people of a country? _________________________
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3. What is a cartel? Explain why a country might want to be in
a cartel. ____________
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4. Why might other countries not like an oil cartel like OPEC? ___________________
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5. What do you think will happen to a country like Saudi Arabia when
the oil reserves run out like they have in Bahrain? _______________________________________
______________________________________________________________________
______________________________________________________________________
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