Middle East’s Oil Industry Remains Strong Despite Turmoil

Middle East’s Oil Industry Remains Strong Despite Turmoil

By Kim Reynolds

In the world of investment, the prices of important commodities go up whenever there’s political turmoil that can strain the flow of trade. Oil’s value has always been volatile because the Middle East, a major producer of the precious black liquid, is no stranger to geopolitical issues. In light of recent events, however, it would seem that the region would have to adjust to a new setup as the U.S. now has an increased supply of oil for themselves.

Disturbance in oil production or shipments due to strife used to be the major reason why prices of precious commodities go up in the U.S. However, oil prices in the global market showed no signs of an upward movement in the past couple of months. Even with radical groups spreading violence all over the Middle East, oil prices and production remained steady, especially in the country of Iraq. As of this writing, oil is at $56.13 per barrel.

In Southern Iraq, oil exports remain steadfast and even reached new highs. Unaoil, one of the biggest oil companies that serve Iraq, opened a North Rumalian hub last year in order to support its growing operations in the country, and reports say that geopolitical concerns do not have a major effect on the firm’s ventures.

The U.S. used to rely heavily on the Middle East for shipments of oil but now, hundreds of private companies are involved in the oil production of the country. Despite its abundance of oil, however, Amos Hochsten, the U.S. Special Envoy for International Energy Affairs, said that the U.S. must still maintain and deepen its relationships with the countries in the Middle East. After all, there’s no guarantee when the U.S. will need support again from one of the major oil producers in the country.

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Kim is a freelance writer specializing in business news. She used to cover fashion shows in 2004 but her interests changed when she made her first investment. In her free time, she likes reading novels written by Sidney Sheldon.


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Filed under Analysis, PIDE (Policy, International Development & Economics), Politics

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