Home Page - Gulf in the Media
HomePoliticsEconomy                               Set Gulfinthemedia.com as home page
Opinions
"Postings of opinions published in the Gulf and international newspapers
 Print  Send This Page
Save Listen to this Article
Effects of Arab Spring on global oil industry   

Gulf Times - 08 May, 2012
Author: Dr Yasser al-Saleh

Almost 15 years ago, I started my professional career in the oil industry by undertaking extensive training on board large oil tankers that transport crude oil from Saudi Arabia to the United States. The tanker crews always welcomed the shorter trip when we returned via the Suez Canal instead of having to travel around the tip of Africa.
Eight hours transit in the canal was an occasion to appreciate and reflect on the efforts that had been put into constructing this key shipping channel, and also the strategic importance of the Middle East and North Africa (Mena) region.
The so-called Arab Spring or Arab Awakening, which brought political instability to Libya, Egypt, Yemen and more recently Syria, has brought another opportunity to reflect on the significance of this region through considering the likely profound impact that any political volatility can have on the global oil market.
The Mena region has massive hydrocarbon resources (some 60% of the world’s proven oil reserves and 45% of global gas reserves). Most of those resources are concentrated in the Gulf Co-operation Council (GCC) region, which is home to approximately 40% of the world’s proven oil reserves and 25% of natural gas reserves. So, the Mena region, and the GCC in particular, is of great importance to the global energy market and to the economic stability and prosperity of the world.
The current political unrest has already been reflected by a surge in oil prices, but the world hopes that this will be the only short-term effect of the transitional phase that the region is currently experiencing.
Consider the case of Libya – a member of Opec, which has the largest national reserves in Africa. Libya is blessed with some of the world’s highest quality crude oil, and its geographical proximity to Europe has always placed the country in a favourable position in the global oil market.
In 2010, Libya was exporting around 1.8mn barrels of oil per day in addition to substantial amounts of natural gas. It is therefore no coincidence that the Libyan revolution has been a key reason for the recent rise in oil prices, despite Saudi attempts to bridge the oil production gap.
As a result of the escalation of events in Syria, among other factors, Iran’s oil production has begun to be negatively affected. Additionally, the European Union voted earlier this year to stop buying Iranian oil from this summer, but the Iranians did not wait and cut off oil sales early.
From its position as the global “swing producer”, Saudi Arabia has recently reiterated its pledge to keep the oil market well supplied if sanctions hit Iran. However, any military sanction on Iran is likely to cause a host of serious events, which may include closure of the Strait of Hormuz.
Speak to any oil professional who works on shipping oil through the Strait of Hormuz and they will tell you of its importance to the oil industry. Around 18mn barrels of oil – originating from Saudi Arabia, Iran, Kuwait, Iraq and the United Arab Emirates – pass through the Strait on a daily basis. An alternative route could be the Fujairah Pipeline (currently under construction), which upon completion should be able to deliver most of Abu Dhabi’s oil exports to the Indian Ocean.
To put this into perspective, the amount of oil that could be shipped through this pipeline represents only 10% of the total oil currently transiting this strait. Another alternative route – albeit an operational one – is the Saudi pipeline, known as Petroline. However, presently, this pipeline can only carry around 25% of the amount of oil shipped through the Strait of Hormuz.
The closure of this Strait will not only result in “skyrocketing” oil prices with disastrous effects on the global economy, but will also hurt the Iranian economy which currently relies on the Strait to transport oil, food and other essential goods.
Thus, apart from being blessed with the vast majority of the world’s hydrocarbon reserves, the Mena region has a major geographic significance due to its influence on key oil and gas shipping routes, which include the Strait of Hormuz as well as the Suez Canal and Bab-el-Mandeb.
Moreover, bearing in mind that production in many of the non-Mena oil fields has already peaked, and with Iraq and Libya now offering high production targets, many industry analysts anticipate that the Mena region will be responsible for supplying at least 90% of global oil production over the next 20 years.
Substantial investment will be needed to develop oil and gas fields in the region, which adds to the challenges currently facing those GCC governments that seem to face a relatively lower chance of revolutions taking place within their territories.
Taking such factors into account, one can only envision an increasingly important position for the Mena region.
However, without greater effort to respond to increasing pressures, particularly with regard to issues related to transparency, social equality, democracy and unemployment, the region is destined to witness endless public uprisings breaking out with a disastrous impact on the global economy.

Dr Yasser al-Saleh, senior research fellow at INSEAD Innovation and Policy Initiative in Abu Dhabi.
 
The Houthi Advance on Yemen's Capital
Source : The Counter Punch  
Date : 2014-10-31
Author : Gabriele vom Bruck
Last month the international media awoke to the fact that while the world has been focused on the fight against Islamic State (IS) militants in Syria and Iraq, Yemen's capital...
The solution is banning Islamist parties
Source : Al Arabiya TV  
Date : 2014-10-31
Author : Abdulrahman al-Rashed
It’s not easy for anyone who believes in the right of others to participate (in politics) to end up with the following conclusion: Politics in the Arab world will neither...
Iran's human rights record is spiraling downwards
Source : Al Arabiya TV  
Date : 2014-10-31
Author : Majid Rafizadeh
The latest findings which were revealed this week to the United Nations General Assembly highlight the increasing alarm with regards to the human rights records in the Islamic Republic. The...
Karbala via Glasgow
Source : Asharq Al-Awsat  
Date : 2014-10-31
Author : Amir Taheri
Anxious to reach agreement with the P5+1 on Iran's nuclear program, President Hassan Rouhani is trying to mobilize support for his divisive policy. Last month, he tried to woo nationalists...
The haris is king
Source : Kuwait Times  
Date : 2014-10-31
Author : Muna Al-Fuzai
The janitor of a building is called a haris in Kuwait, and he is indeed an uncrowned king. He knows everything about everyone. He is the one who deals with...
Doha 2019: a unique opportunity to connect the world of athletics
Source : Gulf Times  
Date : 2014-10-31
Author : Sheikh Saoud bin Abdulrahman al-Thani
The next two days have the potential to be of great importance to the sporting future of Doha, the sporting landscape of the Middle East and the future of athletics...
The Syrian Labyrinth
Source : The Counter Punch  
Date : 2014-10-30
Author : Conn Hallinan
Reese Erlich's informative and insightful book "Inside Syria: The Backstory of Their Civil War and What the World Can Expect" brings to mind the Greek myth of a vast maze...
Western fascination with 'badass' Kurdish women
Source : Aljazeera.com  
Date : 2014-10-30
Author : Dilar Dirik
A young Kurdish woman called "Rehana" has garnered a great deal of media attention over the past few days, after reports emerged claiming that she had killed more than a...
Will Egypt Mediate for Assad?
Source : Asharq Al-Awsat  
Date : 2014-10-30
Author : Abdulrahman al-Rashed
"Syrian President Bashar Al-Assad is seeking, through his diplomatic contacts, to convince Egypt to mediate and convince Saudi Arabia-currently Egypt's biggest ally-to amend its strict stance regarding him and his...
What does having one thousand consumer protection cases mean?
Source : Oman Daily Observer  
Date : 2014-10-30
Author : Ali Al Matani
As many as 994 cases were referred to the Omani Public Prosecution by the Public Authority for Consumer Protection (PACP) in the second half of the current year, with an...
No to dual citizenship
Source : Arab Times  
Date : 2014-10-30
Author : Ali Ahmad Al-Baghli
After the liberation from Saddam's heinous occupation in 1991, Saudi's Middle East Newspaper, Sharq Al-Awsat, published a report that around 120,000 Kuwaitis were living in the Kingdom of Saudi Arabia....
Sanctity of the living
Source : Saudi Gazette  
Date : 2014-10-30
Author : Nawar Fakhry Ezzi
Car accidents kill thousands of people in Saudi Arabia every year. Some of these people are not pronounced dead until six hours later when the doctors find them to be...
Delayed military strategy
Source : Gulf Today  
Date : 2014-10-30
Author : Brian M. Jenkins
President Obama has been repeatedly accused of delaying. Critics say he dragged his feet on sending more troops to Afghanistan, on addressing the dangers in Libya, on providing support to...
E-security and education quality
Source : Kuwait Times  
Date : 2014-10-30
Author : Labeed Abdal
The Organization of Islamic Cooperation (OIC) countries plan to discuss the latest technologies and issues pertaining with e-security, such as cloud computing and large data storage protection, as well as...
Up, up and away KAC!
Source : Kuwait Times  
Date : 2014-10-30
Author : Dr Hassan Abdullah Johar
I recently had the honor of accompanying the social sciences college dean, colleague Dr Hanan Al-Hajri, and a group of political science students to visit KAC's board director Rasha Al-Roumi...
Total 200 Results in 14 Pages
1 
For more news, views and reports about this topic, please subscribe
to GRC website: www.grc.net
Sat Nov 1, 2014| 08-محرم-1436هـ
Iran wants sanctions lifted as part of nuclear deal
Saudi investors keen to promote UK trade ties
Hezbollah's claim Saudi Arabia backs terror groups rubbished
UAE textile exports up 7.75% at $ 1.6 billion
UN envoy proposes zones to 'freeze' Syria fighting
QIF: Qatar economy's long-term prospects 'remain compelling'
Kuwait prioritizes protection of human rights - Envoy
EU, GCC to strengthen civil aviation cooperation
Palestinian leader, Arab League hail Swedish recognition of Palestine
Funds bullish on Gulf markets despite oil slide
Bahrain elections on November 22
Profits of petchem sector up 12% to SR28bn in 9 months
ISIS massacred 220 tribesmen in Iraq
GCC lighting sector to hit $ 3.7 billion
Kuwait welcomes Sweden's recognition of Palestinian statehood
Qatar banks' asset base sees QR78bn gain in 9 months: KPMG
    Newspaper Editorials
Cracking down on India's tax cheats
UAE business model a shining example
More>>  
    Opinions
The solution is banning Islamist parties
Iran's human rights record is spiraling downwards
More>>  
    GCC Press Agencies
Day's main stories from the GCC Press Agencies
    Reports
Justice in Transition in Yemen
The United Arab Emirates (UAE): Issues for US Policy
More>>  
    Bank Reports
GCC Markets Performance – May 2014
Saudi Arabia: Baseline Macroeconomic Forecast 2014-16
More>>  
    GRC Analysis
Saudi Arabia and the ASEAN Periphery: Cambodia, Myanmar, and Brunei
NATO and the Future of Gulf Security.
Saudi-Vietnam Relations
    GRC Commentary
Price of not heeding Kingdom's advice
On Relations between Rulers and Citizens: The Need for a New Social/Political Contract in the GCC States
Key Issue Facing the Saudi Ruling House.
    GRC Book Review
Beyond Regionalism? Regional Cooperation, Regionalism and Regionalization in the Middle East
India, GCC and the Global Energy Regime: Exploring Interdependence and Outlook for Collaboration.
    GRC Press Release
Gulf Research Center press releases to the media
    GRC Publications
GCC-Asia Ties and Collective Security
Perpetuating the Rentier State: Patrimonialism in a Globalized World
Labor Market Integration in the GCC Countries
    GRC Newsletters/Bulletins

Enter your email to get the Newsletter
Go
      
Privacy Policy | Contact Us | Terms & Conditions | About Us |
Weather | Qibla Directions | Hijri Date Conversion Tool
Full Page :total time:0  |   24-- 24 Middle Page :0  --   | Right : 24 - 24--en--sess-enreq-en-coming