Challenges for Middle Eastern Petroleum Exports: Regional Conflicts or Internal Instability?

Abstract

What are the main challenges impacting the exports of oil and gas from the Middle East to the global markets? The focus has always been on the regional conflicts such as the Arab oil embargoes applied in the aftermath of the 1967 and 1973 conflicts with Israel, the Iran-Iraq war in the 1980s, the Iraqi invasion of Kuwait in 1990, and the subsequent international sanctions against Iraq between 1990 and 2003, which had caused interruption of petroleum supplies from the region. Nevertheless, other important factors could well result in major disruption in petroleum exports from the Middle East, including the numerous internal causes of instability in most of the regions countries. The list of these instability features is long and comprises the autocratic nature of many regimes there and the struggle for power, ambition and structure of armed forces, sectarian minorities and religious rivalry, ethnic heterogeneity and minorities, social impacts of economic constraints, demographic explosion, and troubles caused by foreign labour migration, as well internal flight and flows of refugees. These factors are most of the time interrelated and interdependent with the interstate conflicting issues such as ideological cleavages, military antagonisms and race, border disputes, disparity in economic development, divergence in petroleum policies, struggles over water, and disparity in population growth. Obviously, these conflict and instability factors together with the turbulent history of the area do not promise future stability: if it is not one country it is another, and if it is not one problematic issue it is another. But a serious effort has to be done to at least identify those factors and try to deal with their negative impacts beforehand. The paper aims to review the impacts of interstate conflict and internal instability on the exports of oil and gas from the Middle East through maritime channels, pipelines and petroleum installations, before analyzing the potential sources of instability and conflict, many of which could well be imminent and possibly dangerous.