The Middle East and their oil production have been an important part of the world’s international business and economy. Oil is one of the most coveted natural resources and the Middle East has held this equity, along with some international power, since the early twentieth century. Oil was first discovered in Saudi Arabia on March 3, 1938; just six years after the territory became the Kingdom of Saudi Arabia. This discovery would change the world. Over time, Saudi Arabia quickly became the world’s largest producer and exporter of oil. After World War II ended, Europe was in need of cheap resources to help rebuild and Saudi Arabia supplied them their oil. Relationships were quickly made with the West who heavily depended on the imports for their industries. Western political and government leaders formed bonds with the country. The West began to give the Middle East countries protection in exchange for cheap oil. The oil had a positive impact on Saudi
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For example, in October 1973 during the Arab-Israel war, they raised oil prices by 70% and in December, after the war, they were raised by additional 130%. OPEC’s Arab members drastically cut oil production and banned all oil exports to the Western countries that supported Israel amid the war. The consequence of this was a lack of oil and inflation to the western countries and a worldwide recession. The prices continued to rise through 1980 and OPEC grew in power and wealth. The western countries cut their oil consumption, found new alternatives of energy and also found new countries to get their oil from. This hurt the Middle East and in turn they dropped their production and prices. Affects from the Iran and Iraq War, as well as the Persian Gulf War, have also paid their toll on the Middle East in oil production and
For example, in October 1973 during the Arab-Israel war, they raised oil prices by 70% and in December, after the war, they were raised by additional 130%. OPEC’s Arab members drastically cut oil production and banned all oil exports to the Western countries that supported Israel amid the war. The consequence of this was a lack of oil and inflation to the western countries and a worldwide recession. The prices continued to rise through 1980 and OPEC grew in power and wealth. The western countries cut their oil consumption, found new alternatives of energy and also found new countries to get their oil from. This hurt the Middle East and in turn they dropped their production and prices. Affects from the Iran and Iraq War, as well as the Persian Gulf War, have also paid their toll on the Middle East in oil production and