Saudi Aramco
The largest world supplier oil company is Saudi Aramco. It is the most profitable company on the earth. Since it is the most powerful oil company, it has a great impact on the world economy. As a result, a strong international relationship was built with the Kingdom of Saudi Arabia. In addition, the strong developing of international relationship with other industrial countries resulted in massive contributions to the politics, economy, and many different aspects. In 1933, Saudi government bestowed oil concession to California Arabian Standard Oil Company (Chevron). The main factor for this grant was to explore the oil in the eastern region of the Kingdom of Saudi Arabia. After discovering a huge amount of oil, part of the grant was sold to other American oil companies in order to cooperate with each other to do more exploration and to deal with such a big job. In 1948, all these American companies were incorporated into Arabian American Oil Company (Aramco) shared 50% of its profits with Saudi government. Furthermore, the company’s shares had been acquiring by Saudi government to gain 100% of its ownership. In 1988, the name changed to Saudi Aramco. The Headquarter of Saudi Aramoc is located in Dhahran, a city in eastern region of Saudi Arabia. Saudi Aramco produces 10 million barrels of oil each day. The history of Saudi Aramco went through three major periods: exploring oil, interconnecting with the USA, and contributing to other many universal events.
Exploring Oil:
In 1923 the worst prediction in the history of oil, the Arab peninsula did not attract Great Britain to colonize this empty desert for the general manager of British Petroleum Company. Sir Arnold Wilson announced that the Arab Peninsula did not cont...
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...s the Arabs’ nightmare. In 1973, Saudi Arabia, Egypt, and Syria decided to fight against Israel to revenge Arabs’ defeat which was in 1967. The plan was that Egypt and Syria would battle by the military while Saudi Arabia would use oil as a weapon. The result was Saudi Arabia stopped supplying oil to the USA. It took a while to settle the conflicts down. Eventually, the relationship was rehabilitated.
It was hard to believe that such a desert has the largest oil reserve on the earth. In addition, it was hard to imagine that such a company underwent many universal concerns and leaded essential tasks. Saudi Aramco was set up in the desert after discovering the oil in Saudi Arabia. Formed an oil company, the USA and Saudi Arabia initiated a new relationship which based on the interests of both countries. Therefore, Saudi Aramco has magnificent emergence in the world.
The Middle East has historically rebuked Western influence during their process of establishing independence. When Britain and France left the Middle East after World War II, the region saw an unprecedented opportunity to establish independent and self-sufficient states free from the Western influence they had felt for hundreds of years. In an attempt to promote nationalistic independence, the states of the region immediately formed the League of Arab States in 1945. The League recognized and promoted the autonomy of its members and collaborated in regional opposition against the West until 1948 when Israel declared independence. Israel represented then and now an intrusive Western presence in the Arab world. The ongoing Arab-Israeli conflict typifies this cultural antagonism. The Cold War refocused attention to the Middle East as a site of economic and strategic importance for both sides, yet the two hegemons of the Cold War now needed to recognize the sovereignty of the Middle Eastern states. With their statehood and power cemented, the Middle Easte...
After the Second World War, the world was more interesting in oil than ever before. The conflict itself made the countries of the world realize that oil was a serious factor in the quest for power. From this point in history, oil was considered the driving force behind a successful economy and therefore attaining power. Therefore the quest for oil heightened during and after World War II. In the effort to acquire more oil, many countries began to seek out additional locations to drill and this drove the United States to the Middle East. In late 1943 a man named DeGolyer who was a geologist went on a mission to Saudi Arabia to survey the possibility for oil. His mission there concluded that “the oil in this region is the greatest single prize in all history”. With such a conclusion it is not surprising that the United States began extremely concerned with the oil concessions there.
Crude oil is a strategic product, in the sense that it is a most necessary fuel for all industries of nations in the world. While crude oil is a most strategy input for productions, transportations, and national defends, whoever have control over this source of energy will dominate over other countries, so in addition to supply and demand factors that affect the price, consumers must pay attention to the producers and export countries that can use this product as a weapon. Such as during and after the 1973 Arab-Israeli War, the oil giant Saudi Arab, members of the Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo against the United States and other Western European countries, which including the Netherlands, Portugal,
The economy of the Kingdom of Saudi Arabia is oil-based economy with a strong control of its government over the major economic activities. Saudi Arabia owns 18% of the petroleum reserves of the entire world, and has been frequently ranked as the leading exporter of petroleum. Also, it has played a significant and leading role in OPEC for many years. The United States of America, on the other hand, has technologically the most dominant economy in the world. The firms of the United States are at the pole position in technological advancements, particularly, in the field of pharmaceuticals, computers, aerospace, and military equipment. This paper covers a comparative study between the economy of the Kingdom of Saudi Arabia and the United States on the basis of their Gross Domestic Product.
Bilgin Pinar,‘‘Whose ‘Middle East’? Geopolitical inventions and Practices of security”, International Relations, Vol.18, No.1 (2004)
“One Arab nation from Gulf to the Ocean,” gives meaning to the term “Pan-Arabism” in the Middle East. A notion where Arab nations transcend their state boundaries to form political mergers with other states and achieve an ‘Arab unity.’ The existence of Arab states had been tumultuous throughout the decline of the Muslim order, the end of the Ottoman Empire, the Palestinian defeat, Six Day War and Arab-Israeli war in 1973. This essay will critically examine Foud Ajami’s case for a raison d’état in the Middle East and his claim that there were six broad trends leading to the alteration of the balance of power away from Pan-Arabism and towards the state. It will be argued that Pan-Arabism was a romantic ideology that Arab states found convenient to support, all in advancement of their nationalistic state agendas. It was never a realistic endeavor that was physically undertaken by the Arab states and was thus never alive in a tangible sense. However, Pan-Arabism as an ideology had a place in the Middle East and was thus alive in an ideological sense.
Since its discovery back in the year 1858 crude oil has been become one of the most sought after resources on the face of the planet. It is due to this fact that the oil industry has fallen into a rather odd category in the case of globalization and seeking out new markets, new labor and new customers. The reason being that the need for crude oil and fuel is always present therefore the product of oil in its basic sense sells itself and the companies do not have to go out and publicly advertise it in the sense that clothing lines and other commodities do. Oil companies must focus more on the matter of why an individual should buy their oil and along with other alternative fuels over their competitors even though in the end the companies products are the same thing. The company ExxonMobil has been the superior company in the oil industry for quite sometime now, and had plenty of success as individual companies before their merger in 1999. The reason for there success is partially due to the power they wield as the most successful company, leading to many new refineries around the world, making deals with smaller companies to gain access to new markets and are leading the world in alternative fuel research. However these things all come naturally to the biggest oil company in the industry, the real question is how they became the powerhouse they are now. That question can be answered by the way in which the company has not focused in globalizing their product of fuel and oil, but globalizing the image of the company company. This is achieved by focusing on charity in which they donate hundreds of millions of dollars, Foreign Direct Investment in areas in which they wish to expand by attempting to provide these impoverished areas wit...
Such efforts to mask the involvement of Americans in Saudi Arabia are doomed to eventual failure because of the unique nature of the Saudi territory, comprising some of the most symbolically important desert in world...
In conclusion in this paper I talked about oil and its impacts on the economy and the environment in the country of Qatar. Qatar’s economy cannot support its city population if it were to run out of oil. Qatar has a lot to offer from oil, gas, and wind energy. This is why people come to Qatar, for jobs in energy. The economy is based on energy resources, which could be Qatar’s economic downfall in the far
Currently, the government of Saudi Arabia controls the economy by limiting foreign investors and regulating business within its borders. Oil accounts for the majority of the country's income, accounting for 90 percent of export revenue and 80 percent overall (“Saudi Arabia,” n.d.). Prices over $105 per barrel is required for the budget to remain balanced. The current drop in oil prices places a strain on the Saudi Arabian economy; expansion into the bond market somewhat eases this strain (“Saudi Arabia,” n.d.). A McKinsey Global Institute report states that Saudi Arabia can double its GDP and create millions of jobs by changing its economy from a government centric style to “a more market-based approach” (Al-Kibsi et al., 2015). "Despite cuts and financial challenges, ongoing internal and external concerns are driving an increase in defense spending” (Hedges, as quoted by Mustafa, 2015). The last half decade has seen the defense budget of Saudi Arabia growing at a rate of 19 percent a year (Mustafa, 2015). This shows that the military, despite the economic downturn, continues to play an important role in the Saudi Arabian
Economy, industrial, investment growth has always created urban growth but an increased demand for oil to main energy the development engine, because oil is a limited resource with several distinctive energy traits, because of its energy creating property it has cause worldwide competition for oil resources, there are other energy sources but oil is the most efficient and generates the most power. In order to gain access and control of the oil resources, some countries resort to realist approaches such as, the United State launching and having military presences in the Middle East during Iraq War. East Asia countries also competed intensely for with realist approaches for Russia’s eastern oil pipelines. Major oil producing hubs in the world are going through “political turbulence and social disorder” (Oil Security Reshapes China’s Foreign Policy) which has become a breeding ground for non-state actor, who use terrorist attacks to display their messages. Because these terrorist are expanding outside of their central area and targeting oil reserves, the importance of oil cannot be over-looked especially with very dependent countries like China. The issue of worldwide energy security threat has stirred global attention.
OPEC was established in the 1960's and ever since, Saudi Arabia gained a reputation of being the major power of the organization. Saudi Arabia has the biggest oil reserves in the world and production costs lower than any country. (economist.com 2003)This means that it is a natural monopoly and economies of scale arises; when the long run average total cost falls as the quantity of output increases as illustrated in figure 1. (Gans, J. King, S., Mankiw, N., 2003) Saudi Arabia is the undisputed leader of OPEC.
Saudi Arabia, the leader of OPEC (Organization of Petroleum Exporting Companies), maintains a powerful position in negotiations with the U.S. and other countries. Its vast supply of oil directly effects per barrel pricing and is a unique bargaining tool in international politics. But Saudi Arabia is no ordinary country in today's world. Its borders are governed by a royal family of nearly 30,000 individuals, all of which share most of the wealth and almost all of the power. Its people, with foreign exceptions, are wholly Islamic and many practice the faith with a frightening sense of devotion. And despite the immense revenue generated by its oil reserves, part of its population still lives in absolute poverty. Although recently it has seen immense change, it is still a country fair behind the progressive world.
Initially and primarily the US’s influence in the Middle East was to prevent a hostile power from gaining control over a vital resource. With the outbreak of the 1973 Arab-Israeli conflict, the perception of oil as a strategic commodity surfaced. The Arab states cut off all petroleum deliveries to the United States and forming cutbacks to other countries. At the same time, the Organization of Petroleum-Exporting Countries (OPEC) announced a rapid increase in the pr...
The Middle East is probably the most important influence on the global petrochemical industry today and will remain so for many years to come. However, prospects of a war in Iraq are raising concerns, and logistical and feedstock challenges could hem in the region's growth. Saudi Basic Industries Corp., or SABIC, the majority of which is owned by the Saudi Arabian government, has grown to 40.6 million metric tons of petrochemical production and sales of $9 billion in 2002 to become the 11th largest petrochemical producer in the world. Iran, through the government-owned National Petrochemical Co., has made its petrochemical industry a strong second to Saudi Arabia. Iranian petrochemical output was 12.5 million metric tones in 2001. A number of other countries in the region, including the United Arab Emirates, Kuwait, Qatar, Oman, and Egypt, have either completed major petrochemical projects or are planning them.