ECONOMICS

Energy economics in the Middle East

Energy economics in the Middle East

Thesis Statement

“Energy economics is an applied sub-discipline of economics and it does not show itself as a self academic discipline based on the supply and usage of energy in the societies.”

Introduction

Collectively, Middle East region is known for its export and production of oil. The entire region is significantly impacted by the oil industry. This is due to the generation of wealth and the movement of the labor in the region. However, many countries in the region have taken adequate measures to expand their economic activities in recent years. Economics of energy in studies forces that direct agent like governments, individuals, organizations to generate energy resources. Energy commodities like gasoline, natural gas, electricity, diesel fuel, coal, or propane - can be used to generate energy services for human activities like motive power, lighting, electronic activity space heating, water heating, cooking etc.

Discussion

Middle East is considered as the most important producers of energy in the entire world and it is an important region that stabilizes the economy of the globe. Today, this area is producing the world's 37% of oil and 18% of its natural gas. When it comes to the reserves The Gulf is considered as king in the entire region. It is holding around 65% of the global oil reserves and about 45% of its gas. As per a geological survey around 50% of the unexplored oil and 30% of natural gas are found in the region mainly in Saudia Arabia, Libya, UAE, Kuwait, Iraq and Iran. The national security and energy problems ensuing from dependence on particular energy resource oil is of great tension in the region. The looming crisis with Iran is a destabilizing factor on the oil market. The presences of the hydrocarbons of the world in this location greatly signifies that the economy of this region depends on the production of oil and natural gas, this region plays an important role in the world wide economy and political affairs. The war between Iran and Israel created a great tension in Middle East region and the other countries within it. It is considered an important factor for a region to be free from any violence in order to gain economies of scale and growth in all aspects.

Since the dependence of nations on oil is becoming uncontrollable, it becomes deliberately essential for them to secure their entrance to the region of Middle East. Constructing positive coalition in the region is the only key to maintain good relations with the Middle Eastern countries and also maintain the diplomatic support against the human rights disobedience. (Karbuz S, 2004).

A growing consensus is needed for the diplomatic and economic development to control the Middle Eastern influence. An alternative energy routes from central Africa and Asia should be made in order to develop the region. Environmental factors like politics, social, technology greatly influences the economics of a region. The transportation system of the world mainly depends on oil produced by the ...