According to McDonald et al (2005), “every $1 increase in the price of a barrel of oil adds nearly $23 million a day to Middle East OPEC revenues (Libyais not included in this calculation). On an annual basis, this is equal to about $8.4 billion.
In light of the $22 increase since the beginning of 2011, the daily revenues of Middle East OPEC countries have increased by $506 million, which will amount to $185 billion at year’s end if the price remains stable”. Oil revenues are indicated in appendix 2.
The Islamic revolt has produced an interest trend in the policy implementation in theMiddle Eastcountries. Most of the countries where the revolt has taken place have rich oil reserves and have autocratic leaderships. The revolting individuals are keen on benefiting more from the revenues from the natural resources from their country, hence contributing the increased welfare benefits by King Abdallah ofSaudi Arabia.
Increasing oil prices are bound to motivate oil importers to reduce the consumption of oil, and eventually seek out alternative sources of energy as indicated by Orr (2010). The fact that the increasing oil imports are detrimental to their balance of trade and economic outlook will fuel a migration towards other sources of energy in the form of renewable energy. In addition to being more versatile, renewable energy is more ecologically friendly and affordable in the long-term.
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