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Business Sample Paper on Oil Exploration in Southwestern Iran

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Business Sample Paper on Oil Exploration in Southwestern Iran
Introduction

Oil exploration in southwestern Iran, at a location known as Masjed Soleyman, began at the beginning of the twentieth century (Kubursi, 2015). The global significance of oil was later recognized by the Western nations, which led to a British-German-Turkey conflict to control oil pipeline at the beginning of World War I. Throughout the early 1900s, various countries in the Middle East began the exploration of oil. Oil production in the smaller Gulf, Iran, and Iraq rose from fifteen percent to thirty percent between 1960 and 1970.In the Middle East, oil resource has been related to success and problem stories. Kubursi (2015) argues that the Western nations triumph over oil exploration and production in the Middle East. He criticizes the dominance of the Western nations in controlling this resource, asserting that it has resulted in the Middle East conflict since World War II. Oil has also been speculated to be a critical resource used as a weapon by some selfish and corrupt leaders and elite individuals in the society, to fight the influence of Western doctrines in the Middle East (Fawcett, 2013). Additionally, oil is linked to cases of international terrorism as it is regarded as the major financial source to fund radicalized groups. On the other hand, in some countries such as the United Arab Emirates, oil has been a source of success to the economy of this country. For instance, the development and growth of Dubai, to the extent of being a tourist destination site globally, is evidence to support the notion of Gause (2014) that oil production can transform the society in a positive way. This study will explore the implication of oil production in the Middle East and analyze whether it is the main source of conflict experience in the Middle East region.

 

Implications of Oil in the Middle East

Saudi Arabia has the highest oil reserve among the Middle East countries, consisting of approximately two hundred and sixty-two billion barrels (Richards, Waterbury, Cammett, & Diwan, 2013). Other Arab countries that make up the thirteen members of the Organization of petroleum exporting countries (OPEC) also contribute to a significant percentage of the world’s oil reserve. The implication of oil in Saudi Arabia has had more success than problems, compared to nations like Iraq and Kuwait, among others. Oil has changed the economy of the UAE, which is made up seven states that merged in the mid-twentieth century. The economic growth and development of Saudi Arabia have been transformed to become a top country in hiring foreign workers, with statistics indicating about six million foreign workers in UAE. The existence of proper governance and policies to guide the management and accountability of revenue from oil resources have assisted Saudi Arabia to remain peaceful and focus on transforming its economy. However, in the other Arab States such as Iraq, Yemen, Syria, and Palestine, among others, the conflict has remained prevalent. Jones (2012) has linked the occurrence of conflict in those states because of oil production. Revenue earned from oil export is unequally distributed in the society, enriching the few elite individuals and making the public to suffer. Therefore, Jones (2012) affirms that oil in the Middle East has been a curse than a blessing to many of the oil-rich states.

Oil exploration in the Middle East region has resulted in problems experienced in this region. The region is regarded as being unstable, evident through recurrent chaos and civil war in some of the Middle East countries (Fawcett, 2013). However, Richards, Waterbury, Cammett, & Diwan (2013) postulates that these conflicts are a result of foreign countries attracted to the production of oil. Before the discovery of oil, the Middle East region was a vast land comprised of desert and semi-desert places. Conflicts experienced among the people in this region was not as a result of oil but rather the occupation of land in search of water and pasture, because Arabs practice nomadic lifestyle. The discovery of oil was a success story in accelerating the development and growth of these nations in the Middle East. Oil resource contributed immensely to the growth of the Middle East countries, but with this blessing, problems began to become prominent in the region. The powerful Britain and France controlled key regions in the area because of oil resource. Oil discovery took a wrong turn to become a source of conflict in the region.

Imperial powers, France and Britain, influenced the politics of the Middle East states, where they had control over by supporting corrupt leaders. These corrupt leaders never embraced democracy, but rather believed in the governance by military rule. Corrupt leaders are offered weaponry support by some of the Western countries for oil resource in return. It is evident that oil production in the Middle East region has not assisted in improving the economy of the countries. Gause (2014) supports this notion by arguing that the Middle East economy is performing poorly as compared to other regions that have no resources such as Singapore. The region is still dependent on imports, and the benefits of oil are directed towards the few elite individuals, resulting in imbalance social and economic development. It eventually leads to the formation of radicalized terrorist groups that believe they are fighting for social equality in the society. 

The Middle East region would be peaceful if it were not for the discovery of oil and its exploration in the area. Oil resource in the modern day is considered the highest foreign earner in any economy of a country. For example, Kubursi (2015) affirms that revenues earned by Iran because of oil export to other nations rose significantly. The Huge volume of oil export resulted in large quantities of income to the country’s economy. Contrary to these claims, Richards, Waterbury, Cammett, & Diwan (2013) asserts that oil has caused the Arab region to experience uprisings, political instability, and underdevelopment of the states. The corrupt governments and its leaders have abused democracy and disrespected the rights of its citizens. Critics have investigated and analyzed that oil resource and democracy are two aspects that have never worked well and achieved durable success to the economy of nay country. The Middle East region has proved this notion right by the conflicts experienced in the countries for decades. Top political officials and leaders manipulate the system to get richer, while the majority of the society suffer and dwell in poverty; increase in the rich-poor gap sparks hatred towards the government.

The effects caused by rentier in the Middle East region has contributed to the instability of the Arab countries. Gause (2014) links rentier to political and economic theory by explaining that rentier dogma in the Middle East happened when some Arab states derived substantial amount and volumes of its national income from the rent of oil resources to Western nations such as the U.S, which is the largest consumer of oil in the world. This concept of rentier has had adverse implications because oil revenues are used to develop local political backing by collecting few or no taxes. Kuwait is one of the states that practiced this concept, which led to the development of conflict in this country in the late 1980s. Jones (2012) posits that Arabs living in regions with insufficient or lack oil resource have led to the uprising to persuade and exert political pressure to states rich in oil, to use the revenues to enhance integrated economic development of the Middle East region. The uprisings escalate to military conflict among various states because of misunderstandings and poor foreign policies among the Arab states.

Oil exploration in the Arab region consequently resulted in gradual cases of unaccountability by the government in oil-rich countries.  Political leaders imposed increased taxes to benefit themselves and their corrupt government. Prevalence of autocratic governance among oil-rich state in the Middle East resulted in the poor representation of the public in government affairs. Kubursi (2015) supports the notion that the population would not demand accountability from the government because of being oppressed. In the end, few individuals who decided to stand for justice and equality were either detained or executed for attempted cases of treason. Their supporters formed rebel groups to fight the injustices in the country, while the corrupt leaders purported that these fighters are rebels trying to overturn the government. Therefore, the modern day conflict in the Middle East has been because of fighting for democracy to strip of corrupt leaders from their power and influence.

Oil resources in the Middle East region have been used a platform to provide threats and gain support in case of a disagreement, leading to continuous strife among Middle East countries. Gause (2014) talks about the invasion made on Kuwait by Iraq military forces in the early 1990s. All this conflict between Iran, Iraq, and Kuwait originated in 1982 when Kuwait offered economic support to Iraq against the Iranian state to end the revolutionized governance. The financial aid offered by Kuwait resulted in Iran attempt to alter the decision and support of Kuwait through several attempts to destroy oil tankers in Kuwait in the subsequent years. The end of Iraq-Iran conflict has resulted to Iraq government owing Kuwait billions of dollars as debt. The agreement between Iraq and Kuwait over the debt faced several issues that tarnished the relationship between the two oil-producing nations. Fawcett (2013) argues that Iraq made a decision to invade Kuwait in 1990, leading to global intervention by the U.S to repulse Iraqi forces. However, during the withdrawal of Iraq military forces, they bombed and set six hundred oil wells of Kuwait of fire. This action led to a poor relationship between the two states. Therefore, oil resource culminated to the escalation of war and jeopardized diplomatic relationship among Arab states.

Conclusion

Discovery of critical and precious natural resources such as oil in the Middle East are the main cause of conflict. Despite other reasons such as religion being another aspect of the conflict in the Middle East, the precious natural resource is attracting Western countries that interfere with the functioning of the oil producing nations to dominate and control the production of oil for their economy. For example, exploration of oil in Libya resulted in the development of a poor relationship between Libya and America, which researchers in the Arab countries link to the execution of Gaddafi. Therefore, oil should benefit the population and ensure peace is maintained at all cost.

 

 

References

Fawcett, L. (2013). International relations of the Middle East. Oxford: Oxford University Press.

Gause, G. (2014). Beyond sectarianism: The new Middle East cold war. Brookings Doha Center Analysis Paper, 1-27.

Jones, T. C. (2012). America, oil, and war in the Middle East. Journal of American History, 208-218.

Kubursi, A. (2015). Oil, Industrialization & Development in the Arab Gulf States (RLE Economy of Middle East). Abingdon: Routledge.

Richards, A., Waterbury, J., Cammett, M., & Diwan, I. (2013). A political economy of the Middle East. Colorado: Westview Press.

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