ABSTRACT
This chapter analyses the significance of the vertical integration of the international petroleum industry in the Middle East, presenting the relevant facts about the industry. Most of the oil in each of the Middle East countries is produced by a single national operating company or group of companies wholly or substantially owned by two or more of the seven major international firms. In the international petroleum industry it is alleged that it is the raw-material producers who are getting disproportionate profits, while the refining and distribution activities in the industrial countries are carried on at a loss. The chapter examines the reasons why so much profit is attributed to crude oil production in the operations of the vertically-integrated oil companies. It also analyses the relation between profits on crude oil and profits on refining and distribution with respect to the demand of the raw-material producing countries for a share in the latter.
