The Decline of Arab Oil Revenues

Abdel Majid Farid, Hussein Sirriyeh

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000622331
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: International Relations
• Index: Politics & International Relations

First published in 1986, The Decline of Arab Oil Revenues explores the fall in the economic value of Arab oil reserves in the 1980s. Some of the threats to Arab countries include depletion of oil resources, rise of alternative sources of energy, international policies designed to control oil prices and growing conflicts of interest between producing and consuming countries. The editors suggest that any decline in oil revenues would negatively affect the economic, political, social and psychological structure of Arab societies since they are yet to explore non-oil sources of wealth. Consequently, the editors stress on the importance of researching the desert, which covers 94% of Arab lands, as a potential source of wealth. Given the current global shift towards sustainable forms of energy, this book is a timely reminder of the economic and political implications of such a shift on Arab countries for students of political science, international relations, geography, and economics.

1 Decline in Arab Oil Revenues

DOI: 10.4324/9781003307259-1

M.M. El-Imam

Oil is a depletable resource. For many countries, it will last only a few more years. For the whole world, the exhaustion of oil resources may take place within the lifetime of the present new generation. Oil prices have become a key economic variable, both for producers and consumers. The processes of production are localised in areas where natural endowments are known to exist and extraction operations are considered to be economic — in the light of forseeable future prices. While levels of consumption have risen worldwide, those of the industrial countries were significantly higher than others.

Regional Characteristics

Arab countries differ widely in terms of the lifespans of their oil resources. The countries may be classified as follows:

1. All countries presently members of OPEC. The oil resources of these countries will continue, for several years, to exceed their own needs. They may be further subdivided into two subgroups:

a. Algeria and Iraq, which have a large hydrocarbons sector but at the same time possess other natural resources, as well as sizeable human resources.

b. Those countries whose major resource is oil but which lack other natural resources. Most of its members also suffer from scarcity of manpower. They include Libya and the four Gulf states of Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

2. Countries with greater balance between oil resources and needs, which are expected to run out of oil resources in the near future. They include Oman, and the other members of the Arab group within OPEC (OAPEC), Bahrain, Egypt, Syria and Tunisia.

3. Countries which may have limited oil resources but are essentially importers of oil and its products.

a. A middle-income group comprising Jordan, Lebanon and Morocco.

b. Less developed countries including Djibouti, Somalia, Sudan and the two Yemens.

Differences in the amount of oil resources exist within each group. Table 1.1 reveals these differences in quantitative terms and compares the amounts of oil resources in the Arab world to those of other parts of the world.

The members of the group 2, owing to their limited oil resources, are expected to drop out of the list of oil producing (and exporting) countries in the near future. The first of these is Egypt, which was the first country in the region known to possess oil reserves, although it is considered a newcomer to the field of oil exports. The bulk of Egyptian production had been for domestic purposes. The country constructed its first refinery in 1913 and a fertiliser factory in 1951 (which was destroyed after a few years). It joined other exporters only recently, after raising production beyond domestic needs. This happened in a period when Egyptian reserves did not grow appreciably. As a result, the life expectancy of its oil resources declined fast from the 1973 level: Egyptian production policies led to a loss of 64 years, of which only 24 could be compensated through additions to reserves. Similar developments were experienced by other members of the second group. Tunisia was least affected; but in spite of achieving 31 times the 1973 level of production, Tunisia lost 18 years due to changes in production policies. Syria occupies an intermediate position, gaining 17 while losing 22 years.

Countries in group 2 provide a model for what may occur duri...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Original Title
• Original Copyright
• Contents
• List of Contributors
• Preface
• 1. Decline in Arab Oil Revenues
• 2. Prospects for Arab Oil Revenues
• 3. Factors Affecting Demand for Arab Oil
• 4. Alternative Sources of Energy
• 5. Political and Strategic Impact on Arab Relations with Industrialised Countries
• 6. Impact on Arab Economic Relations with Advanced Capitalist States and Developing Countries
• 7. Social and Psychological Impact on the Arab World
• 8. Social Tension in the Arab World in the Post-oil Era
• 9. Economic Impact on Arab Relations with the Third World
• 10. Political, Strategic and Economic Effects on Arab Relations with the Third World
• 11. Economic Impact on the Arab World
• 12. Economic Impact on Development in Arab Countries
• 13. Comments on the Economic Symposium Papers Given
• 14. Conclusions and Recommendations
• Appendix 1: Energy and Economic Statistics in the Arab World
• Appendix 2: Prominent Issues Discussed at the Third Arab Energy Conference, Algeria, May 1985
• Index