Persian Gulf Oil

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.