Natural GasPetroleum

Why Does the Middle East Have So Much Oil?

Massive Oil Reserves

When it comes to global oil reserves, the Middle East is home to the largest concentration of oil and gas on the plant. Energy analysts from Carnegie Mellon University estimate that between 80 to 85 percent of the world’s total energy needs are powered by fossil fuels like oil, coal, and natural gas (Metcalfe, 2019). Given that the Middle East has the largest total reserves of crude oil and natural gas, the region’s oil- and gas-producing countries have long had an immense amount of influence on the global economy. These natural resources held by many of the Middle Eastern countries have been critically valuable for global development and have contributed enormously to the modernization of the global economy. So how did much of the world’s valuable fossil fuel resources become clustered primarily in one region? Petroleum geologists and academic researchers have developed a wide range of theories about how the Middle East ended up developing these fossil fuel reserves.  

The oil-rich nations in the Middle East, including Saudi Arabia, Iran, Iraq, Kuwait, Syria, Qatar, Bahrain, the United Arab Emirates (UAE), Yemen, and Oman, account for about 3.4 percent of the world’s total land surface. However, these countries contain around 38 percent of the world’s total natural gas reserves and 48 percent of the total known reserves of crude oil (Sorkhabi, 2010). When people think about the Middle East, they think about oil. According to 2020 data from the U.S. Energy Information Administration, around 27 percent of the world’s current oil production is sourced from this region. For as long as fossil fuels have been a primary source of global energy, the Middle East has been one of the world’s foremost oil and gas suppliers. Because of the region’s ability to produce and sell massive quantities of oil and gas, economic development in the Middle East has largely been fueled by the fossil fuel industry.

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History of Middle East Oil Exploration

The development of the oil and gas industry in the Middle East dates back to 1901, when William D’Arcy was granted permission to have his British oil company search for oil in Persia (now present-day Iran). For seven years, D’Arcy’s business partner, George Reynolds, searched endlessly for oil. Finally, after exhausting significant financial resources, oil was struck in southwestern Iran in 1908. The discovery of the Masjid Suleiman oil field set off a new era of prosperity for many countries in the Middle East. After oil was first found, D’Arcy promptly established the Anglo-Persian Oil Company in 1909. By 1935, the Anglo-Persian Oil Company was transformed into the Anglo-Iranian Oil Company, which then was converted yet again to British Petroleum in 1954 (Alfred, 2000). D’Arcy’s persistent efforts and subsequent discovery in Iran had initiated a global race for oil in the Middle East.

Today, Iran remains as the world’s ninth-largest oil producer. The country currently produces around 3.2 million barrels of oil per day (Carpenter, 2019). While the oil industry has provided Iran with much of the country’s fiscal revenues, many of the country’s current geopolitical issues can be traced back to the days when Britain first started to become a dominant power in the region. During World War I, the British government secretly became the majority shareholder in the Anglo-Persian Oil Company. As the British government continued to initiate efforts to take more control over the region’s fossil fuels, tensions started to rise. Following both of the World Wars, joint operations between British and American policy makers attempted to reshape Iranian politics. By 1979, tensions embroiled into the Iranian Revolution, which created lasting impacts to the region and has ended up shaping the current power dynamics within the Middle East.

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Geologic History

When it comes to understanding how the Middle East has become one of the world’s hubs for fossil fuel production, it is necessary to look at the distant past to comprehend how fossil fuels first started to form in this region. The vast majority of today’s fossil fuels, which include oil, coal, and natural gas, were created over millions of years during the prehistoric era. While some people assume that fossil fuels are the remains of ancient dinosaurs, this is a common misconception. In fact, the majority of Earth’s fossil fuels are comprised of the remains of ancient plant life and microorganisms that lived millions of years ago. When these plants and microorganisms gradually decomposed over many millennia within extreme pressure zones and oxygen-free environments, they eventually transformed into dense forms of carbon and petroleum, which is now extracted for energy. Within the perfect oxygen-free conditions, a wide range of carbon-based organisms can be converted into fossil fuels over a geologic timeframe.

Today’s fossil fuels are primarily the remnants of ancient jungles and lush forests. Over millions of years, as ancient forests and plant life incrementally sunk below the ground within subduction zones, energy and carbon subsequently became trapped deep within layers of sediment and ledge, which can now be extracted with today’s modern fossil fuel extraction technologies. Since geoscientists and petroleum engineers say that fossil fuels were once representative of fertile forests and lush plant life, how did these resources end up under the arid Middle Eastern deserts?

According to geologists, the Proterozoic to Cambrian period transition that took place around 542 million years ago is where long-term fossil fuel formations started to take place in the Middle East. After a period of micro-continental movements and ocean water subduction along the northeastern edge of the African continent, the Middle East started to rapidly evolve into a region filled with microorganisms and a diverse array of marine life. This subsequent rise of what has become known as the Tethys Ocean, coupled with various tectonic plate movements, created a number of rift basins that allowed lush forests and other plant matter to sink deep beneath the Earth’s surface within an oxygen-free environment. The fold-and-thrust movements of the plate tectonics in the region created thick layers of sediment and rock that covered ancient microorganisms and plant matter.

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Rifting, Faults, and Fractures

Over 70 percent of Middle Eastern oil was produced as a result of compacting and nutrient-rich sediments during the Jurassic and Cretaceous periods (Sorkhabi, 2010). The original formation of massive quantities of hydrocarbons and other fossil fuels in the Middle East could have only occurred as a result of successive geologic events that broke apart the Arabian Peninsula from Africa and created the Persian Gulf and the Red Sea. Huge levels of oil are currently found in subduction and rift zones of the Middle East, while relatively small quantities of fossil fuels are found along the outer edges of these regions in countries like Turkey, Oman, and Syria. Extensive academic literature conveys that fossil fuels in the Middle East have been formed within sedimentary petroliferous seabeds and layers of carbonate-rich shale (Mahfoud, 1995).

Evidence of extensive rifting (a geologic term that describes linear zones where the Earth’s lithosphere has been pulled about by shifting plate tectonics) can be seen within today’s Middle Eastern topography. In addition to the Gulf of Suez and the Red Sea, rifting is visible within the Gulf of Aqaba, located west of the Arabian Peninsula and east of the Sinai Peninsula. Many commercial oil fields have been found in these tectonic rifts. Moreover, much of the oil and the gas in the region has been found within deep faults and fractures in the Earth’s crust. While many of these faults and fractures have already been explored and have been found to contain oil, there are a series of significant faults within the Eastern Mediterranean Sea that still have largely been unexplored. Just north of Egypt and west of Israel, oil companies have predicted that there may be massive new reserves of oil deep below the sea. However, thick layers of salt formations have prevented companies from effectively exploring for oil in this region. With new drilling technologies, oil and gas companies hope to significantly expand their exploration efforts in the near future.

The Necessary Ingredients

For oil and gas reserves to be successfully produced, a few major ingredients are needed. These include carbon, hydrogen, a lack of oxygen, a massive amount of heat and pressure, followed by millions of years of formation time. Many regions in the Middle East had these ingredients present to allow for oil and gas reserves to accumulate over millions of years. Conversely, Middle Eastern regions like Turkey, Oman, and Syria have found significantly less fossil fuel reserves because not all the critical oil and gas ingredients were present over the course of history. Geologists point to a lack of subduction zones and the presence of minimal levels of hydrogen as the main reasons why these regions do not have more oil and gas reserves (Mahfoud, 1995). On the other hand, Saudi Arabia has been fortunate to hold the most critical oil-production elements within the region.

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Saudi Arabia and the UAE

With 12 million barrels of oil produced per day that account for nearly 12 percent of the world’s total output, Saudi Arabia is the region’s biggest oil producer (Carpenter, 2020). Moreover, with total estimated reserves of 337 billion barrels of oil, Saudi Arabia is poised to maintain its place among the world’s top oil producers for the expected future (OPEC, 2020). While international oil companies are not permitted to extract oil within Saudi Arabia, some multinational corporations like Royal Dutch Shell, Exxon Mobil, Sumitomo Chemical, and Total Petroleum have been able to partner with Saudi Aramco on some petrochemical and refining projects.

Located just east of Saudi Arabia, the United Arab Emirates has also been fortunate to hold the necessary ingredients needed to form massive reserves of oil and natural gas. According to the U.S. Energy Information Administration, the United Arab Emirates produces around four million barrels of oil per day, making the country the world’s seventh-largest oil producer. Abu Dhabi National Oil Company has held control of most of the country’s oil reveres and has established production-sharing agreements with numerous multinational oil companies like BP, Royal Dutch Shell, and Exxon Mobil. In addition to oil, the United Arab Emirates has made efficient use of some of the world’s largest reserves of natural gas, which has helped to fuel the rise of desert metropolises like Dubai and Abu Dhabi.

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Future Diversification

As other regions around the world have started to find and extract significant oil and gas reserves, many economists and energy analysts have hypothesized how diminishing demand for Middle Eastern oil may impact the region’s economies. While many of the Middle Eastern oil-producing countries have relied heavily on oil and gas revenues to sustain their government budgets, some cities and countries have been working to diversify their economies away from fossil fuel production to hedge against market disruptions. Saudi Arabia and Dubai have been pushing forward more significantly with diversification efforts than many of the other countries in the region. Dubai especially has already made significant strides to diversify its economy, with now less than two percent of the city’s revenue coming from oil, which was as high as 43 percent in 1992 (DiPaola, 2010). Economists are eager to see if other Middle Eastern governments will follow Dubai’s lead into the future.

Sources

Alfred, R. (2000). “May 26, 1908: Mideast Oil Discovered — There Will Be Blood.” Wired.

Broad, W. (2010). “Tracing Oil Reserves to Their Tiny Origins.” The New York Times.

Carpenter, J. (2019). “The Biggest Oil Producers in the Middle East.” Investopedia.

DiPaola, A. (2010). ”Dubai gets 2% GDP from oil”. Bloomberg.

Mahfoud, R. (1995). “Middle East Geology: Why the Middle East fields may produce oil forever.” McNeese State University.

Metcalfe, T. (2019). “What are fossil fuels?’ NBC News.

OPEC. (2020). “Saudi Arabia facts and figures.” Organization of the Petroleum Exporting Countries.

Sorkhabi, R. (2010). “Why So Much Oil in the Middle East?” GEO ExPro Magazine.

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