Oil production, innovation, and politics in the Middle East

Authored by: Hamid E. Ali , Nesreen N. Al Anbar

Routledge Handbook of International Relations in the Middle East

Print publication date:  April  2019
Online publication date:  March  2019

Print ISBN: 9780415317283
eBook ISBN: 9781315229591
Adobe ISBN:


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The Middle East (ME) countries’ economies are integrated into the world economy and subject to global shocks. Oil prices and rents vary according to global economic expansions, contractions, and conflicts. This chapter will address the following issues: (1) the external political forces shaping oil politics, including oil production, technology, and innovation; (2) internal forces, such as oil rent impact on economic growth, youth unemployment, political reforms, and the future of the welfare state; and (3) the geopolitical tension between Saudi Arabia and Iran. The oil supply is driven by technology, innovation, and competition among the oil producers. The future of fossil fuel depends on technological innovation that drives down production costs and enhances efficiency. The current friction within the Gulf Cooperation Council (GCC) is a result of the US retreat from the region as well as of the dwindling oil revenues needed to sustain the welfare state. In the ME, the regional rivalry has not only diminished their capacities for innovation to meet the structural changes in the oil industry but also halted their efforts to embark on meaningful political and economic reform.

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