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People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.

If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.

In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire

Guided by the twin logics of energy security and energy independence, American actions and alliances in region became a self-fulfilling prophecy. The very thing the United States sought to eliminate in the Middle East—insecurity—became a major consequence of America’s growing and increasingly militarized entanglement.

In effect, the essential relationship of dependency between the United States and the Middle East has never been “oil for security.” It has in fact been oil for insecurity, a dynamic in which war, militarization and autocracy in the region have been entangled with the economic dominance of North Atlantic oil companies, US hegemony and discourses of energy security.

Although the destabilizing contradictions of this dependency have now undercut both American hegemony and the power of the North Atlantic hydrocarbon industries, the oil-for-insecurity entanglement has nonetheless created dangerously strong incentives for more conflict ahead.

Again and again, the unlikely partners would fall out—usually over the Arab-Israeli conflict, much later over the 9/11 attacks. But the fundamental bargain struck by U.S. President Franklin D. Roosevelt and then-King Ibn Saud in the waning days of World War II that consummated the U.S.-Saudi relationship 75 years ago would never break

lawmakers in oil states such as Texas, Louisiana, North Dakota, and Alaska accuse Saudi Arabia of waging “economic warfare” and have drafted legislation to immediately pull out U.S. troops and furl up a decades-old U.S. security umbrella that has protected the vulnerable Saudi state

many in Washington are coming to question the very fundamentals that have underpinned a very special bilateral relationship for 75 years—essentially, U.S. security to ensure the free flow of Saudi oil and Saudi support for U.S. designs in the Middle East

Should the mass adoption of electric vehicles occur, access to reliable and affordable sources of minerals like cobalt, graphite, lithium, manganese, and nickel, which are used in modern electric-vehicle batteries, will come to occupy a larger share of energy security concerns, especially since one country has already gained control over much of the world’s production and processing of those minerals

oil has remained abundant and affordable, despite major production disruptions during the Arab Spring from 2010-2012, in Libya from 2013-2016, and in Venezuela after 2017. In fact, oil prices had dropped 60 percent from their 2008 highs by early 2020, even before the COVID-19 pandemic had made a dent in the global economy.

falling oil prices throughout the 2010s may have lulled Western policymakers into believing that the Russian Federation, whose economy is heavily reliant on oil and natural gas exports, would become more docile. It did not; instead, it continued to modernize its military and intimidate its neighbors

Forty years ago today, the Organization of the Petroleum Exporting Countries (OPEC) voted to raise the posted price of their oil by 70 percent.  The next day, several Arab oil producers decided to impose an embargo on oil sales to the United States to punish it for supporting Israel in the unfolding Yom Kippur War.  While the two decisions were not formally linked, policymakers have worried ever since that OPEC could again restrict the global supply of oil. A lot has changed since 1973.  Oil embargoes used to happen fairly frequently: There was one in 1956, and another in 1967.  Until 1973, they didn’t attract much attention.  But due to structural changes in the oil market in the early 1970s, the one in 1973 had a huge impact.  Since that time, there hasn’t been a single international embargo. (The current sanctions against Iran are an importers’ boycott, not an exporters’ embargo.)  What happened?

Even without an embargo, policymakers worry that OPEC manipulates the oil market. For example, James Woolsey, a former CIA director and self-proclaimed energy hawk, argues that OPEC has a grip on global oil and gasoline prices so tight that the U.S. will never be free of its influence.  Like most people, Woolsey wrongly believes that OPEC is a powerful cartel. Many economic studies cast doubt on that idea, but there are still some scholars who support the proposition. OPEC rarely if ever influences its members’ oil production rates.  It has almost no impact on prices.  My research looked at OPEC’s behavior since 1982, when it first adopted formal production quotas for its members.  I found that joining OPEC has little influence on new members’ oil production rates; members cheat on their quotas a whopping 96 percent of the time; changes in OPEC quotas have little impact on changes in production; and members of OPEC produce oil at about the same rate as non-members of the group, all else equal.  Any of these findings would cast doubt on OPEC’s status as a cartel; collectively they are damning.

Most OPEC members – from Venezuela to Nigeria to Iraq – are pumping their oil as fast as they can, with no spare capacity

desert oil pipeline that Israel once operated as a secret joint venture with Iran could be a major beneficiary from the Trump-brokered peace deal with the United Arab Emirates. With the UAE formally scrapping the eight-decade Arab boycott of Israel—and other oil-rich Gulf neighbors likely to follow suit—the Jewish state is on the cusp of playing a much bigger role in the region’s energy trade, petroleum politics, and Big Oil investments

Stepping cautiously out of the shadows, the Israeli managers of Europe Asia Pipeline Co. (EAPC) say their 158-mile conduit from the Red Sea to the Mediterranean Sea provides both a cheaper alternative to Egypt’s Suez Canal and an option to connect to the Arab pipeline grid that transports oil and gas not just to the region, but to the seaports that supply the world

the pipeline, which connects Israel’s southern port of Eilat with a tanker terminal in Ashkelon on the Mediterranean coast, could nip off a significant share of the oil shipments now flowing through the nearby Suez Canal.

In February, OPEC called for an oil production “freeze” to raise crude prices in conjunction with Russia. But this effort collapsed at a meeting in Doha, Qatar, in April when Iran refused to join any freeze in order to regain the pre-2012 production levels of close to 4 mbpd it enjoyed before U.S. and European Union nuclear sanctions were imposed, following the removal of certain sanctions after the 2015 nuclear deal. A similar proposal failed at the OPEC meeting in June, again following Iran’s refusal, despite outreach by the Qataris.

OPEC again called for a form of output cut on Sept. 28 at an extraordinary meeting in Algiers. Markets bit on the news, with Brent prices rising sharply by about 15 percent in the following week, from $46 to $52 per barrel.

Can action by the cartel sustain higher crude prices over the long term? Probably not. Like a desert mirage, the image of an OPEC resurrection vanishes when approached.

Peak demand for oil may still be years away, but covid-19 has given the Middle East and north Africa a taste of the future. Prices of the black stuff plummeted as countries went into lockdown. The region’s energy exporters are expected to earn about half as much oil revenue this year as they did in 2019; the IMF reckons their economies will shrink by 7.3%. Even when the virus recedes, a glut of supply will probably keep prices down. Faced with budgets that no longer add up, Arab states must adapt.

in May the Algerian government said it would cut its budget by half. Things are no better in Iraq, a big oil exporter, which is nearly broke. Even stable producers such as Oman and Kuwait are living beyond their means. Saudi Arabia, the world’s biggest oil exporter, has been burning through its cash reserves for months. Money that was meant to smooth the kingdom’s transition to a less oily economy is now propping up the old petrostate.

Egypt exports little oil, but over 2.5m of its citizens work in oil-rich countries. Remittances are worth 9% of its GDP. As oil revenues fall and some of those jobs disappear, Egypt will suffer, too. The same is true of Jordan, Lebanon and the Palestinian territories, which have long relied on the Gulf to absorb their jobless masses.

the White House is embarking on an economic offensive intended to collapse the Iranian government, which is already contending with a steady tempo of internal unrest driven by economic and political frustrations

Those who have lamented Obama’s restraint in the Middle East will now have another taste of its antithesis: the purposeful American disruption of the status quo underpinned by the assumption that things can only get better. Unfortunately, that rarely holds true in the Middle East

It’s not just oil: U.S. sanctions will be felt across every aspect of the Iranian economy, although in theory, agricultural products, medicines, and medical devices are exempted. In practice, the repercussions are sweeping and unpredictable

Oman remains vulnerable to both foreign and domestic sources of instability as Saudi Arabia and the United Arab Emirates seek to expand their regional influence. Potential causes of domestic unrest—including high unemployment, budget deficits, and dwindling oil reserves—lack clear-cut solutions. Sultan Haitham faces multiple challenges even without the threat of foreign meddling, yet Oman’s neighbors may view the death of Qaboos as a unique opportunity to advance their own expansionist agendas.

Oman resisted Saudi Arabia’s attempts to use the Gulf Cooperation Council (GCC) as a tool to serve the Saudis’ foreign-policy agenda, most visibly when Oman’s minister of state for foreign affairs publicly rejected King Abdullah’s plan to deepen the GCC into a Gulf Union in 2013, and was the only GCC state to not participate in the Saudi-led military incursion against Yemen that began in 2015.

Sultan Haitham comes to power at a time when the Trump administration has repeatedly signaled its support for Saudi Arabia and antipathy toward Iran. The belated naming of low-ranking U.S. officials to attend the official ceremony honoring Sultan Qaboos was widely interpreted as a slight against the Omanis; the U.K., in contrast, sent both Prince Charles and Prime Minister Boris Johnson to pay their respects.

Like Western investors, the kingdom’s elites are uncertain about what the new order means for the country’s economy. The new Saudi leadership has indeed created new opportunities, but many of the deep structural barriers to diversification remain unchanged. The bulk of the public sector remains bloated by patronage employment, the private sector is still dominated by cheap foreign labor, and private economic activity remains deeply dependent on state spending. Addressing these challenges could take a generation — and it will require patience, creativity, and a clearer sense of priorities.

While a band of Al Saud brothers used to rule collectively with the king as a figurehead, decision-making has now become centralized under one man

ruthlessness and willingness to take risks radically at odds with the cautious and consensual political culture of the Al Saud clan

The Biden administration has said it is ready to consider tough new measures against Saudi Arabia after its decision last week to side with Vladimir Putin and cut oil production.Observers said the move signalled a dramatic abandonment of the US president’s recent attempts to seek a rapprochement with Crown Prince Mohammed bin Salman, and casts doubt over the future of the US-Saudi security relationship.

The congressional backlash against Saudi Arabia escalated sharply this week after Robert Menendez, the powerful Democratic chairman of the Senate foreign relations committee, threatened to freeze weapons sales and security cooperation with the kingdom, saying Prince Mohammed was helping to “underwrite Putin’s war through the Opec+ cartel”.

The move by the Opec+ group of the oil cartel and its allies to cut oil production over the objections of the White House, was a double blow to Biden, undermining his attempt to cut Russian revenues by lowering the oil price, and threatening a spike in domestic petrol prices weeks before congressional elections. It was all the more stinging as it followed a reconciliatory trip to Jeddah by Biden in July, when he was photographed fist-bumping with the crown prince.

the Arab states, led by Saudi Arabia and UAE, have decided to take matters into their own hands, according to Arabian Business. They are using their vast oil wealth to buy up tracts of land the size of small countries in Africa, intending to turn them into agricultural hotbeds to feed their multitudes. They have paid millions of dollars to the governments of Sudan and Ethiopia, and smaller amounts to those of Kenya, Sudan and Mozambique, for the use of hundreds of thousands of acres of agricultural farmland.

“It wasn’t only the prices going high that worried some of the Gulf countries, it was also the fact that, at the same time, a number of major food exporters, decided to impose export bans in an attempt to keep prices down” said David Hallam, an analyst with the FAO. “So what they feared was that not only were they facing high prices, but it might not be possible to secure supplies at any price.” And that, in turn, makes the wealthy Arab states, with the food crisis for their own rapidly growing populations, only more concerned. High oil prices lead to food shortages, which have destabilizing political effects. Interesting times ahead.

For decades, Saudi Arabia has served as the world's central banker of oil supplies. In unstable times, most famously in the wake of Iraqi's 1990 invasion of Kuwait, it has drawn from its spare production capacity of some 1 million barrels to bring prices to heel.

Iraq's revival as a prominent oil exporter is bound to reshuffle a careful power balance in the energy-rich Arab world, particularly between bitter rivals Saudi Arabia and Iran. Saddam Hussein's 2003 toppling created a vacuum that both sides rushed to fill, for example deploying proxy forces at the height of Iraq's sectarian civil war. OPEC is another battlefield for the Saudi-Iran rivalry, and the Saudi kingdom is in no hurry to lose its uncontested status as No. 1. Now, as Iraq stabilizes politically and slowly rebuilds its oil-production capacity, both sides will have to accommodate a more assertive Baghdad. Even if oil production doesn't reach the Iraqis' goal, it will likely be higher than the approximately 1.7 million barrels per day that Iraq was producing just prior to the U.S. invasion.

quota smashers like Iran and Venezuela, who routinely oversell to pay for their costly entitlement programs

the Syria climate conflict narrative is deeply problematic.[2] Not only is the evidence behind this narrative weak. In addition, it masks what was really occurring in rural Syria (and in the country’s northeast region in particular) prior to 2011, which was the unfolding of a long-term economic, environmental and political crisis. And crucially, the narrative largely originated from Syrian regime interests in deflecting responsibility for a crisis of its own making. Syria is less an exemplar of what awaits us as the planet warms than of the complex and uncomfortable politics of blaming climate change.

much of Syria and the eastern Mediterranean region experienced an exceptionally severe drought in the years before the onset of Syria’s civil war: the single year 2007–2008 was northeastern Syria’s driest on record, as was the three-year period 2006–2009

it is reasonable to say, per the Columbia study, that climate change did make this particular drought more likely

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations,"

in a trade that illustrates how the rise of the American shale industry is upending energy markets across the globe, the U.A.E. bought oil directly from the U.S. in December

The end of a ban on U.S. exports in 2015 coupled with the explosive growth of shale production, has changed the flow of petroleum around the world. Shipments from U.S. ports have increased from a little more than 100,000 barrels a day in 2013 to 1.53 million in November, traveling as far as China and the U.K.

U.A.E. crude production was 2.85 million barrels a day in January, according to data compiled by Bloomberg. Output has declined from 3.07 million at the end of 2016 as OPEC and allies cut production to reduce a global glut and prop up prices.

The UAE and Saudi Arabia continue to rebuff the US president as he attempts to counter soaring oil prices prompted by Russia’s invasion of Ukraine. And both countries have been unusually frank about their refusal to step in.

The Saudi and Emirati refusal to bail Biden out – or even to take his calls – has pushed relations between the Gulf states and Washington to an unprecedented low. The extraordinary flow of Russian wealth to Dubai, just as the US and Europe try to strangle Putin’s economy, has inflamed things further.

Usually opaque and often inscrutable, officials in Abu Dhabi and Riyadh have in recent weeks been uncharacteristically blunt to visiting diplomats about the nature of their grievances, and how far they are prepared to take them. One western diplomat told the Guardian that a Saudi counterpart had said: “This is the end of the road for us and Biden, but maybe the US also.”