Oil is found in several regions of North Africa and Southwest Asia
[nwoilwhr].
Know the location of these three oil producing areas!
(1) The Southern and southeastern part of the Arabian peninsula
northwestward around the rim of the Persian Gulf, reaching into Iran
and continuing northward into Iraq, Syria and Southeastern
Turkey.
(2) From North Africa, Algeria to Libya, and (3) Azerbaijan to
Turkmenistan and Kazakhstan, Uzbekistan, Tajikistan and
Kyrgyzstan.
Current estimates suggest more than 65 percent of the world's known oil reserves lie in the North Africa/SW Asia realm [nwoilres]. The oil production of Saudi Arabia, Iran, Kuwait, UAE, and Libya is of great importance to the rest of the world, notably the energy demanding developed realm. When the political boundaries of this realm were defined, mostly by colonial powers, the dimension of the oil reserves existing beneath the desert sand were not known. Major finds occurred in the Kirkuk reserve in Iraq (1927), Iran-1908, Kuwait-1938, Saudi Arabia-1936, and Lybia-1959.
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Creation of OPEC [nwopec]
The swelling volumes of oil from the Middle East were crucial to the post war recovery of a devastated Europe. The Marshall Plan made possible and pushed a far-reaching transition in Europe, the change from a coal-based economy toward one based on imported oil. Additional oil companies (independents) moved into the Middle East and offered their host companies better deals concerning royalties for the host country. This forced the major oil companies to re-negotiate their concession via a 50-50 split between country royalties and oil company profits. This was also in response to deals with Venezuela which avoided the expropriation of oil fields that had occurred in Mexico. Nationalization was avoided for the time being (except in Iran). In 1959, under pressure from domestic producers, Eisenhower was forced to place an import tax on imported oil, or quotas on foreign oil, which hit Venezuela harder than any other country since the U.S. was the destination of 40 percent of its total exports. Venezuela’s proposal of quota system for oil was ignored. In 1958 the Soviet Union tried to divide the western alliance by selling oil on the cheap to western European countries. In order to reduce this threat, the western oil companies cut their posted price thus reducing the national revenues of the Arab oil producers. This galvanized the oil producers into action and Abdullah Tariki, Finance Minister of Saudi Arabia, and Juan Pablo Perez Alfonso also Oil Minister of Venezuela met at the 1959 Arab Oil Congress. In this meeting, the supranationalistic organization the Organization of Petroleum Exporting Countries, OPEC, modeled after the Texas Railroad Commission, was formed. Yet for all its bluster during the 1960’s, OPEC was largely ineffective. The world oil market was overwhelmed with surplus and the exporting countries were competitors. Even when they flexed their muscle during the Six-Day-War of 1967, the United States and other non Arab countries boosted production to make up for the short fall of oil.
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Impact of Oil: A Foreign Invasion
Read the textbook. Pay special attention to the impact that the discovery of oil has had on the realm.
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[The text of the above was written by Scott Girhard, San Antonio College from his online course GEOG 1301 World Geography. Used with permission.]