ABSTRACT
Crude oil is the world's most actively traded commodity. It lies at the heart of transport and therefore of world manufacturing and the production and distribution of food. About 68 percent of the world proven oil reserves lie in the Middle East, almost all in the Gulf region. Oil was discovered in Iran before World War I by British interests. There was a surge of oil discovery during the 1930s and the tempo of commercial exploitation picked up in the decade after World War II. In 1959, Western oil companies cut world prices, thus reducing the income of producing states. In response, the Organization of Petroleum Exporting Countries (OPEC) was established the following year by several Middle East states, including Iraq, Iran, Kuwait and Saudi Arabia, and Venezuela. In the Gulf States, oil income has gone into the hands of the ruling families who controlled the state at the point when income surged.
