World Oil Equation and the Future of Middle East Oil

摘要

In the early 1970's, the oil revenue per barrel obtained by the oil producers began to rise culminating in the large increases registered in the last quarter of 1973. The impact of this increase in oil price, and the subsequent large increase which occurred in 1979 had an enormous impact upon the oil producers and the world in general. The present conventional wisdom is that the decades of the eighties and nineties will see more of the same at one level or another. The purpose of this paper is to turn that conventional wisdom on its head and argue exactly the opposite, namely that the value of oil revenues during the decade of the 1980's will decline sharply in real terms and that this will generate forces which will have an impact on the Arab oil producers at least as great as the impact of the increased revenue during the 1970's, and these forces in turn will have significant implications for the future of the international oil market and the price of oil. The paper is divided into three parts. The first part examines the future price of oil by setting the market context and then examining supply and demand side factors. The second part examines the impact of declining real oil revenue upon the economies of the Arab countries and the implications for the oil market. Finally, the paper examines a recent development in Saudi Arabia in relation to the structure of the armed forces which suggests that the stability of oil supplies from that country could be vulnerable. 42 references, 5 figures, 8 tables. (ERA citation 09:012182)