GRM 2010 GRM 2011

Abstract Details

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Title of Paper:
Who will control the Hydrocarbon Resources of the Middle East during the next decade
Paper Proposal Text :

The emergence of Hydrocarbon and its occupation of the front position instead of coal,

had the basic role in the advancement of humanity and its prosperity during the

past decades, until it became the most commonly exchanged commodity in

international trading, and an indicator of the economic cycle and the power of

nations. The hydrocarbon industry was born in the United States around the time of the civil

war. Sixty four per cent of the world's hydrocarbon was produced in the United States in 1920 .

In the Middle East the first petroleum concessions were granted to the Europeans

In Iran as starting the end of the 19th century . After that the petroleum was discovered

In Iraq .

This product, a giant weapon, regardless of the range of studies and inventions

of alternative sources of energy, will remain the principal energy source during the

next decade. The quantities of the reserves that are disclosed, and the ones that will

be discovered with the advancement of techniques, make hydrocarbon the source that is

the least expensive and the easiest to use.

Does every nation or every economic and political union possess enough hydrocarbon to

be self-sufficient? The answer, regrettably, is no. The fact of the matter is that

most of the proven Hydrocarbon reserve is in the Middle East region, specifically in the

Arabian Gulf region which is a part of, but indivisible from the whole Middle East.

So, on one side, the Hydrocarbon during the next decade will exist in its majority in

nations that consume a small part of it for its needs. On the other side are the

industrial nations led by The United States, in addition to nations that are thirsty

for hydrocarbon for their fast growth, led by China and India.

The Middle East region prior to the Hydrocarbon revolution was divided into two parts:

- The regions of Iran, Iraq, Syria, Lebanon, Palestine and Egypt: They were

regions of wealth throughout history, which always made them attractive for

invasion and war activities from the Persians to the Mongols to the Greeks to

the Romans to the Ottomans.

- The Gulf regions made up of Kuwait, the United Arab Emirates, Qatar,

Bahrain, Oman and Saudi Arabia: they were regions of infertile desert inhabited by

unsettled Bedouins. The backbone of their economy was fishing, raising livestock,

and some light trading of materials brought from Iran and Iraq and other regions

close by.

In retrospect, the Middle East region, in both of its divisions, was ruled by

nations, big and small, and by tribes fighting among them, not knowing stability

and peace until The Prophet Muhammad came and united them under the religion

of Islam, and organized and ruled them by the Koran . This was a new

learning institution for them and inspired a different way of thinking and living.

The region then felt the abundance and the success, and a new nation was

established in it receiving wealth from most of the old world. With the Islam

religion and all this wealth and power the Arabs were elevated to the rank of God’s

chosen people, living with power, success , development and pride.

The emergence of Hydrocarbon in Middle East region turned the social balances and the

relation between the ruler and the people upside down: At first, the ruler provided

protection for his community which in return ensured the flow of goods and riches

to him, making the soul of the tribe enjoy strong bonds. Then the giant Hydrocarbon

companies, guided and supported by their nations, came and said to the ruler: in

return of giving us the right to operate in the land of your district, we give you

large amounts of money, and we guarantee the continuation of your rule and that of

your off springs after you. This way, the ruler no longer needed his community but

the reverse was true, and this was the beginning of the break-up in these societies.

Even after the process of nationalization which took off from Iraq, and the

creation of the OPEC organization, the ruler kept distributing a little of the wealth

to his people, and a lot more of it to his family and to form a military establishment

to protect his rule from his people first and his neighbors second. This was

driving the people to desert their ruler and to stop supporting him during difficult

times such as what happened to the Shah of Iran who was overthrown from the

inside, and to Saddam Hussein who was overrun from the outside. Even Kuwait, if

it was invaded on that day not by Saddam Hussein but by Saudi Arabia ( the

Sunnis) or Iran (the Shiites), the matter would have been completely different.

So, the picture in the hydrocarbon nations of the Middle East shows the following:

- Huge amounts of wealth, difficult to count, owned by about 5 percent of the

people (the ruler, his family and big traders close to him).

- 10 percent of the people own amounts of wealth each estimated at many

millions of dollars (traders and owners of business institutions). Their only

concern is to preserve their fortunes and their interests.

- 85 percent of the people have a limited income and receive cost of living help

from the state. This class is very ambitious.

- The United States of America and the industrial nations behind it protect the

rulers of the Gulf nations fearing a cut-off of the Oil supply.

The scenarios during the next ten years can be summarized as follows:

1-The situation remains the same.

2- The ruling class will change and the 85 percent group mentioned above will

seize the power (like what happened in Iran): a difficult situation for the industrial

nations especially The United States, but a convenient one for China with a

greater basic role in the region.

3- An era of a direct American mandate for the region and the emergence of small

nations that are weak and unstable ( sectarian and ethnic ): a very convenient situation for

The United States and the industrial nations, but not an easy one for China.

4- Democratic institutional nations in the region, aware and knowing that hydrocarbon is a

wealth that emerged in their land with the help of techniques created by the

industrial nations led by The United States, Britain and France. Therefore, it is a

must to keep pumping this product, without interruption, in sufficient amounts,

and marketing it at calculated prices that satisfy all sides. In return, the industrial

nations led by The United States, and the fast growing nations such as China

should be aware that the Hydrocarbon, although it emerged with the help of their techniques,

is still inside the land of nations independent and members of the United

Nations. Therefore, all parties must understand that Hydrocarbon is a basic product of multi-

national scope that should be managed by an international policy which is wise and fair .