ABSTRACT

Introduction The analysis of the world oil industry and its implications for the development of the Arab world is an interesting and rewarding topic. No other physical resource of the Arab world is as significant to advanced industrial nations as oil, and no other economic activity reflects as clearly the inescapable interdependence of current events in the Arab world and in the world economy. This is so largely because the Middle East, and the Gulf region in particular, is the location with the largest known oil reserves, believed in 1990 to account for 65.6 per cent of the world total. The geological pre-conditions for oil formation are all present in the geosynclines of the Gulf (i.e. the presence of oil-forming materials, porous rocks, a sequence of rock strata which permit the separation of oil from water and an impermeable rock cap to trap the oil and prevent it from dispersing). Not only do these conditions occur, but they exist on such a scale as to make oil extraction in the Gulf region more attractive, in economic terms, than almost anywhere else.