ABSTRACT
Foreign, economic, and military policy has been influenced by the importance of oil supplies from the Persian Gulf, and will continue to be. With their low production costs and vast reserves of crude oil, the countries of the Persian Gulf will take an even more dominant position in the world energy supply picture in the 1990s than they did in the 1980s. In 1980, Organization of Petroleum Exporting Countries (OPEC) provided over 45 percent of world oil production; in 1989, 38 percent of the world’s oil came from OPEC. Downstream investments by key producers continue to be a further inducement for the OPEC producers to moderate price increases over the longer term. The Gulf crisis has spurred producers’ interest in capturing more value added for their crude and in trying to fill the market void left by Kuwait’s sophisticated export refineries.
