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Oil Prices Rise over Middle East Tensions-Offshore Oil and Gas Reserves the Answer?

Since the 1930s, the oil wealth of the Middle East has fueled society’s advancement toward the new globalized world in which we now live. Most of the world’s economic superpowers are in some way or another reliant on Middle Eastern oil to supplement their energy demands.
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Since the 1930s, the oil wealth of the Middle East has fueled society’s advancement toward the new globalized world in which we now live. Most of the world’s economic superpowers are in some way or another reliant on Middle Eastern oil to supplement their energy demands. There has always been a keen interest in energy independence for these nations, and the budding renewable energy sector may hold the keys to that dream’s fulfillment. However, the world’s economic system is, at this point, still reliant on oil, and with tensions in the Middle East rising amidst political unrest, the distribution of the world’s oil and gas reserves is at risk.

The Middle East supplies just over one-third of the world’s oil and approximately one-fifth of its natural gas. Tensions in the region have caused oil prices to rise dramatically, with speculators and analysts unsure of the political outcome in the various countries that control oil and gas reserves. Algeria, Libya, Bahrain, Egypt and others all have vast fossil fuel reserves that for the most part have been under government control. As their governments undergo regime changes, how those new regimes will distribute their natural resources then becomes uncertain.

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To address this uncertainty, oil dependent countries may be looking to their offshore oil and gas reserves to supplement their fossil fuel needs. While skepticism over the dangers of offshore oil and gas drilling prevail, the reality of it reducing dependence on Middle Eastern oil is undeniable.

Following the BP catastrophes in 2010, the U.S. put a moratorium on offshore drilling in the Gulf of Mexico, one of the country’s richest areas in oil and gas reserves. Will the tensions in the Middle East cause the U.S. to rethink their offshore position? Even in light of recent revelations of the gross overstatements of oil reserves in countries like Saudi Arabia—upward of 40 percent—being revealed by whistle-blower journalism outlet ‘Wikileaks,’ the world’s need to wean itself off of Middle Eastern oil has never been more eminent. The situation in the Middle East may even jumpstart negotiations between conflicting nations over the offshore oil and gas wealth yet to be tapped in the Arctic—which is estimated to contain one-third of the world’s total oil and gas reserves.
 
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