The Importance of Oil in U.S. Foreign Policy During the oil and energy crisis of the mid-1970s Americans became painfully aware of the consequences of the United States dependence on foreign sources of oil. Unfortunately, research and exploration for alternative sources of oil in North America has not been pursued vigorously enough to cease such foreign dependence. As a result, in the mid-1990s Americans find themselves in the same precarious position as they were during the 1970s. The Persian-Gulf War in 1991 was all the proof needed to convince the United States of how strongly oil still influences our foreign policy and international relations in general. Oil and U.S. Foreign Policy: Historical Issues The United States has had a long history of supporting and aiding oil-rich countries in time of political or economic crisis.
Today, OPEC purports to have three primary objectives: 1. To co-ordinate and unify the petroleum policies of the Member Countries and to determine the best means for safeguarding their individual and collective interests; 2. To seek ways and means of ensuring the stabilization of prices in international oil markets, with a view to eliminating harmful and unnecessary fluctuations; and 3. To provide an efficient economic and regular supply of petroleum to consuming nations and a fair return on capital to those investing in the petroleum industry ( Organization of the Petroleum Exporting Countries, 2013). Major Article Summary In January 1975, the Journal of Business published a very interesting article titled “The Future of OPEC” in which th... ... middle of paper ... ...ries.
Crude oil is such an essential part of our modern lives that we can often take for granted that our supply of it will remain constant. Small, unstable countries often hold great amounts of this precious resource, along with the ability to cut our supply in a moment’s notice. Therefore, the discovery of oil in Saudi Arabia caused a dramatic increase in the revenue of the country. Saudi Arabia’s newfound wealth was exploited to serve the political and economic needs of an opportunistic Islamic monarchy, while the concerns and rights of its subjects were consistently cast to the wayside. Through a global trade network, Saudi Arabia found great prosperity at the cost of sacrificing its founding principles.
Works Cited Ismael, Tareq Y., and Jacqueline S. Ismael. Government and Politics of the Contemporary Middle East. Canada: Routledge, 2011. Jones, Toby Craig. Desert kingdom how oil and water forged modern Saudi Arabia.
New York: General Books Llc, 2009. Print. 11. Black, Brian. Petrolia: The Landscape of America's First Oil Boom (Creating the North American Landscape).
On the oth... ... middle of paper ... ...slightest as compare to others, because its indigenous production meets a larger share of its oil requirements so its GDP falling by 0.3% only. Japan’s GDP would reduce by 0.4%, This analysis presumes constant exchange rates and economic growth for the US economy. The present paper is the extension of the existing empirical literature in two directions. First, we have not focused on the oil importing US economy only , rather we analyzed the effects of an oil price shock in two different type of countries which include five oil exporting countries i.e. Saudi Arabia, Norway, Venezuela, Kuwait , Nigeria and five oil importing country i.e.
From the middle of twentieth century, due to exceptional importance of the crude oil in the supply of the world's energy demands, it has become one of the major indicators of economic activities of the world. Even after the appearance of alternate forms of energy like solar power, water and wind, the importance of crude oil as the main source of energy still cannot be denied. This sharp increase in the world oil prices and the volatile exchange rates are generally regarded as the factors of discouraging economic growth. Particularly, the very recent highs, recorded in the world oil market bring apprehension about possible slump in the economic growth in both developed and developing countries. A large number of researchers proposed that exchange rate volatility and oil price fluctuations have considerable consequences on real economic activities.
The quantity supplied rises as the price rises and f... ... middle of paper ... ...by tax. When the oil price goes up, the government will tax more on fuel, vice versa. Therefore, it will benefit the domestic consumers. Other factor is the Iraq influence, political unrest can leave the world without enough oil to go round. 3.