Persian Gulf Oil

March 28, 1973

Report Outline
Growing Impotance of Persian Gulf
Development of the Littoral States
Questions for Future American Policy
Special Focus

Growing Impotance of Persian Gulf

Recurrent violence and tragedy in the ArabIsraeli conflict have continued to distract Western eyes from another region of the Middle East which 4s calmer but equally crucial—the Persian Gulf. With more than one-half of the world's proved oil reserves and perhaps as much as two-thirds of all oil deposits beyond the Communist bloc, the Persian Gulf is fast becoming a focal point of the world energy supply picture. For the industrial nations of the West, this oil is essential to their future well-being. For the Persian Gulf states, oil represents income, development and influence undreamed of only a few decades ago. A recent report from the House Foreign Affairs Subcommittee on the Near East concluded that “never before in the history of mankind have so many wealthy, industrialized, militarily powerful and large states been at the potential mercy of small, independent and potentially unstable states which will provide, for the foreseeable future, the fuel of advanced societies.”

The littoral Persian Gulf states—Iran, Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates and Oman —are a varied lot. Not all are equally endowed with large oil deposits, and there are great discrepancies in their levels of economic and social development. Many quarrel among themselves: there are border disputes, conflicting claims, political differences, religious controversies and traditional rivalries. The most populous and most powerful state, Iran, is Persian while the others are Arabic. But all are likely to benefit in the long run from the enormous oil reserves which lie under the Gulf and beneath the arid lands around it. Professor M. A. Adelman of Massachusetts Institute of Technology, a well-known oil economist, has written: “It seems impossible for so many huge oil-bearing structures to be grouped in one relatively small area, and yet there they are.”

United States policy toward the Persian Gulf currently is in a state of cautious transition. Although the U.S. government has been officially represented in the region for more than a century, only in the last few years has the Gulf received much attention from foreign policy makers. The United States—which now consumes one-third of the world's total oil supply—faces a dilemma. On one hand, Washington is firmly committed to the preservation of Israel. On the other hand, the United States may be forced to import at least 50 per cent of its oil needs by 1985 and to rely on the Persian Gulf area for half of those imports. This country now obtains about 25 per cent of its oil from abroad, mostly from Venezuela and Canada, but those countries cannot keep pace with the growing demand.

ISSUE TRACKER for Related Reports
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Jun. 22, 2012  U.S. Oil Dependence
Nov. 01, 2011  Future of the Gulf States
Jan. 04, 2008  Oil Jitters Updated
Jul. 2007  Energy Nationalism
Sep. 30, 2005  Domestic Energy Development
Jan. 24, 2003  Oil Diplomacy
Aug. 07, 1998  Oil Production in the 21st Century
Aug. 23, 1991  Oil Imports
Oct. 30, 1987  Persian Gulf Oil
Apr. 04, 1986  Oil Prices
Dec. 23, 1983  Quest for Energy Independence
Sep. 23, 1983  OPEC: 10 Years After the Arab Oil Boycott
May 29, 1981  Western Oil Boom
Aug. 25, 1978  Oil Imports
Feb. 10, 1978  Oil Antitrust Action
Dec. 17, 1976  Alaskan Development
May 17, 1974  Arab Oil Money
Mar. 15, 1974  Oil Taxation
Jul. 18, 1973  Offshore Oil Search
Mar. 28, 1973  Persian Gulf Oil
Nov. 01, 1972  Gasoline Prices
Oct. 14, 1970  Fuel Shortages
Nov. 12, 1969  Alaskan Oil Boom
Dec. 11, 1968  Oil Shale Development
Oct. 26, 1960  World Oil Glut
Sep. 10, 1958  Middle East Oil
Oct. 30, 1951  Oil Nationalization
Aug. 11, 1950  Oil Imports
Apr. 23, 1947  Oil of the Middle East
Jan. 22, 1946  Offshore Oil
Mar. 09, 1944  Oil Supply
Dec. 24, 1935  Oil in World Politics
May 07, 1931  Control of Production in the Oil Industry
Mar. 27, 1929  The Oil Leasing Policy of the New Administration
Jun. 08, 1927  Oil Conservation and Stabilization
Feb. 08, 1926  The Mexican Land and Petroleum Laws
Apr. 18, 1925  The Price of Gasoline
Feb. 11, 1924  Background of the Oil Lease Cases
Sep. 01, 1923  Gasoline
International Energy Trade and Cooperation
Oil and Natural Gas
Regional Political Affairs: Middle East and South Asia