Course:EOSC311/2023/Geopolitical Oil Violence in the Middle East

Abstract

This page seeks to explore the relationship between Oil and Statehood in the MENA region. Oil has become a necessary and vitally important resource globally and holds significant effects over both political and economic arenas. Whilst many rely on oil imports, global demand for oil places oil-renter states in a unique political and economic situation, the MENA region being the foremost example. This page will seek to explore some main areas of influence that oil has over the current political identity of MENA region countries. The main focused areas will be the role of violence and its economic effect over oil production, the role of oil over military spending and conflicts and lastly, the role of oil in resource distribution among populations. Whilst some of these reflect on the role of external factors on oil, it must be considered that the existence of oil in the region is extensively linked with such factors. Furthermore, some factors such as violence are necessary to explore others, especially in the form of political violence as dissent. This page should also allow for further questioning of the effects of natural resources, and whether our held assumptions regarding renter states, be it oil or otherwise, should be revisited and investigated.

Oil Politics and Geology

MENA region

Oil, minerals, ores all share intricate links to Political Institutions, and have done so throughout much of both modern and ancient history. Conflicts erupted due to resources, civilizations were founded thanks to natural resources. Oil is no different, despite its rather late discovery, it has become a resource of vast importance, with conflict following soon after. When exploring the role of oil in international politics, we must first consider why oil has become so important and where its value lies. While the role of oil in relations to stability and violence will be explored below, we must address the starting point for conflict. The global need for oil as a hydrocarbon and energy source. Oil is most notably known for its extensive use in energy production, and the increasingly worrisome role of the latter in fuelling greenhouse gases. It is hence this link between oil, energy and climate that generates the link between a geological process and global politics. The nature of oil as a non-renewable source of energy and its highly polluting effect generated the need for both limiting extraction and regulating its uses, leading to the rise of political processes that sought to control both, with the former being widely the most influential one for most of oil extraction history.

MENA (Middle East and North Africa) and OPEC (Organization of  Petroleum Exporting Countries) countries are among the most influential political actors when referring to Oil Politics, with more than half of global oil production coming from OPEC countries, many of which are located in the MENA regions. The link between geology and oil politics hence comes from the unique conditions that have allowed such areas to hold enormous amounts of oil, and the effects that such resource reserves have brought upon the countries seeking to exploit the latter. What before was merely the result of extensively long geological processes, has now become one of the most politicized resources on the planet, allowing for the rise of extensive electrification and technological innovation whilst also being linked to the destruction of global climate and ecosystems. Oil has to now be treated as more than a geological process, being instead approached as a tool for conflict and innovation, carefully guarded and regulated, something that cannot be achieved without the inclusion of political considerations in the decision making process, whether that be for conflict or trade.

Why the Middle East is so Rich in Oil ?

It is unquestionable to claim that Oil is not a major strategic resource in the middle east. Yet, one question remains, why exactly is the middle east so rich in oil to begin with, and how much oil does it really have. To answer that second question, while numbers vary slightly, the overall amount of oil tends to be about 65% of the worlds global reserves. With such huge reserves, the importance of the middle eastern region starts becoming clear, at least politically, yet geologically, it also provides a perfect case study to explore oil origin and formation, and what makes the Middle East geologically suited for Oil. Answering the question as to what makes the Middle East different requires more analysis and explanation than the second question. Much of the reason behind the success of the middle east in holding oil reserves is due to very long periods of sedimentation, high quality source rocks and an extensively vast area available for deposition. While there exist other factors, these remain the main areas of concern regarding the Middle East’s vast oil reserves.

To further address the factors above, the Middle East doesn’t appear to be particularly different from other areas. Source rock and reservoirs are not vastly different from other oil-rich regions, despite being exceptional, what truly stands out being the size of the deposition area. Yet, despite not being vastly different, the latter factors still allow the Middle East to be an exceptional oil region.

What characterizes the Arabian Plate and allows for such widespread oil reservoirs are two source rocks strata, the Hanifa and Shuaiba. Rich in organic material, the formations formed during the lower cretaceous and have since acted as the main source of organic material that have allowed the middle east to produce such vast oil reserves. Furthermore, it was thanks to the deposition of seal, source and reservoir rocks in “optimum juxtaposition both in space and time” that allowed for organic material to not only be deposited, but also successfully accumulate and remain trapped in reservoirs. Seal formations such as the Hith Anhydrite and Nahr Umr Shale, both impermeable rocks, with the first being an evaporite formed in the Tithonian time, and the second a shale formation from the Albian age, ensured that the oil could not leave the reservoirs, and successfully limited its dispersion, instead being largely concentrated in the available reservoirs.

As such, we can answer the second priorly posed question, why is the Middle East so rich in oil? The answer becomes a mixture of optimal conditions that allowed for source rock to deposit, yet quickly be covered by both ample reservoirs and seal rock, which allowed space for oil to accumulate and remain trapped. Such happening repeatedly during the history of the Arabian plate is what allowed for such large amounts of oil to accumulate. The rocks themselves do not differ significantly from other formations, yet the turn of events that allowed for successful oil deposit formation was repeated throughout history with little erosion, resulting in the vast oil deposits we find and exploit nowadays.

Violence and Increased Oil Extraction

Oil extraction appears to follow relatively different market rules when compared to other commodities, although it is unlikely to be the sole to be an exception, it still varies from expected patterns. While we would usually expect heightened periods of violence and instability with lower Oil extraction, or any business practice for that matter, what we see in regard to oil due not follow such pattern. Generally, we see that “oil producers increase extraction in response to increasingly severe political violence”. Yet, not all violence incited the same response by oil extractors.

Outright political violence was found to hold no significant correlation with Oil production, and neither did the lethality of such generalized violence, instead, institutionally or state targeted political violence was found to significantly affect oil production, driving an increase in extraction. This phenomena breaks many preconception regarding the workings of business models, after all why would businesses increase investment while in a situation of state instability. In most industrial settings, such would be a reasonable conclusion, yet, it is likely that due to the finite and geographically limited nature of oil reserves plays an important part in driving this phenomena. When questioned with inaccessibility businesses might attempt to extract the most benefit in the short term, relocation is simply not possible hence increased extraction remains the only option to maximize profits. Such could also be the case for other rare and clumped resources, but that will not be covered.

The question yet remains, as to why only institutional political violence seems to drive oil production while general political violence, not targeting the state or institutions, remains a negligible influence. The answer might be found elsewhere, as when moving away from solely oil focus, we can consider the effects of violence over state fragility. State fragility can be defined as the lack of legitimacy and efficiency in the state and its apparatuses. The concept can be included in the analysis of Oil and political violence through the relation between state fragility and political violence targeting institutions. It is hence necessary to correlate increased state fragility with political violence targeting institutions. From this correlation, we can then explore general political violence and understand its effects in the form of state fragility. In doing so, we find that conflict and civilian fatalities in the MENA region have more limited effects on state fragility than expected. Similarly, we also find that the “association between fragility and violence is weaker” in the MENA region than in other countries, unless it regards political legitimacy. The weaker association explains why general political violence that does not affect the state has a lower if not negligible impact on oil extraction. Because violence and fragility are only loosely associated, they feel to impact business choices, civilian and conflict fatalities also suffer the same fate, failing to affect oil extraction.

State fragility hence allows us to explain why political violence matters when the state is included and not when it is excluded. The questioned legitimacy of the state likely correlates to the threat of inaccessibility and impossibility of extraction for businesses, which leads to increased production. Instead, the opposite is true to political violence targeting civilians or causing non-state fatalities, as these do not impede the ability of the state to function and hence, do not pose a threat to extraction capabilities.

Oil Financed Arms Races

Previously we explored the effects of political violence on oil extraction, showcasing how attacks on the state would result in heightened production. In this section, we will explore the effects of oil production, price booms and lows, on government use of oil-rents and military spending. To clarify, by oil-rents it is meant the different between oil price and production costs, hence increased oil rents signify more revenue.

It is unsurprising to note that oil price does hold a correlation to military spending, although such a correlation is not as limited as expected. Moreso than spending itself, the use of military funds holds a relation to price changes in oil markets, with oil price highs correlating to weapon purchases, whilst active military weapon use correlating with oil price lows. The use of military weapons can be hence used as a means to maintain stability, whilst also promoting further demand in oil. As we have explore in the prior section, oil production responds positively to threat of disruption to supply, yet, so do oil prices. Threat of disruption due to conflict involving the State is likely to lead to increased prices, due to fears of future disruption in the supply. Although unlikely to be a permanent measure, it does allow for oil-renter states to maintain higher oil prices whilst also maintaining a strong military presence for internal stability.

Despite the correlation between military fund allocation and oil prices, it is unquestionable that oil extraction also holds influence over military spending, yet, not in the direct manner that can be expected. Farzanegan M. explores the unique correlation between corruption, oil extraction and military spending, linking the effects of oil to unique spending situations that cannot be reduced to simply more spending during price booms and reduce spending during slump prices. Corruption appears to hold a much more significant effect on oil-rent spending than sole change in oil prices or absolute amount extracted. What is surprising is that military spending per capita appears to decrease with increased rents, although such does not necessarily constitute an absolute decrease, but it does suggest a non-linear relationship between spending and rents. As such, other factors, mainly the role of corruption, must also be considered when factoring the effects of oil rents.

Whilst it is normally considered that corruption and the “resource curse” (will be discussed later) negatively impact stability, such does not appear to be the case, in fact, it is found that oil rents positively affect stability (ibid) under conditions of low governmental division and factionalism. Whilst being a confusing finding at first, it can be explained by considering the usefulness of corruption in renter states. Corruption under a strong leader allows for more political support, whilst a factional government is more likely to entertain conflict under high levels of corruption. This finding must be use in context of the MENA region, as corruption under democratic forms of government is more likely to see similar effects as factional governments. Strong leadership in undemocratic governments allows for more efficient retention of support (ibid). Whilst ironic, corruption appears to act as an effective stabilisation agent for oil-renter states, restricting the possibility of heightened military spending.

Effectively, what is seen is that whilst oil-rent can be linked to a cyclical use of military funds, and can invite conflict during periods of slump, it itself does not drive extensive military spending. Rather, oil-rents are undermined by the rampart corruption, stabilising countries with powerful leaders (concentrated power) and limiting further military spending, effectively siphoning funds away from what could be military expenditure.

Oil States and Resource Distribution

Moving away from topics of military spending and violence, it is now crucial to understand the effects of oil wealth on the population and areas of spending. As we previously discussed, oil-rents and extraction do not necessarily lead to higher military spending, as such, we must consider where such funds are used. We are not prompted with two main possibilities, we either consider that funds are embezzled by the ruling population or invested in the economy and services.

The resource curse is what is considered one of the likely outcome of high levels of oil dependency, common in the MENA region. What we consider the resource curse is the negative effects of resource dependence over economic growth, meaning high levels of income from a single or limited natural resources tends to result in low economic growth. Despite this assessment, the MENA region appears to not necessarily fall under the grasp of the curse, rather, oil-rents appear to have a positive effect over short-term economic growth. Whilst oil dependency does not suggest short-term problems to economic, this does not also suggest a high level of resilience in MENA economies, as many remain “extremely vulnerable to the instability and volatility” of oil markets. The question of distribution remains to be explored, yet these findings suggest that corruption cannot properly account for oil-rent profits, and nor can military spending, as it does not increase positively in response to higher rents.

The distribution of resources is hence thought of being spread out in the form of social services and spending among the population, yet, even this proposition does not appear to be entirely true. To understand how distribution work, we need to approach the question through to assumptions, the government being autonomous and dissent being influential. Autonomous government suggests that it is not constrained by its population, and does not rely upon it for legitimacy and spending. In these situations, dissent appears to be rather impactful, as unconstrained means of spending also suggests that popular pressure should be enough to justify social investment. Whilst the government does not rely upon its people for legitimacy, as do democracies, it cannot risk extensive strife with its people due to stability and security concerns. As such, we find dissent can be directly linked with improved social spending and resource distribution unless it takes the form of strikes or guerilla warfare. Therefore, while we cannot directly link oil extraction with resource distribution, as such does not occur under all situations, we can suggest that forms of dissent can be used to guide governmental spending. Oil presence itself is not enough to justify the claim of improved services alone, instead, it is the dissent coupled with oil presence that ensures improved public spending and resource allocation.y.

Conclusion

Overall, we see significant effects of oil over political and social spheres. The mere existence of oil is enough to heavily shape the way government functions and allocates its resources. The presence of oil allows governments to remain autonomous and corrupt whilst still retaining economic growth and efficiency, corruption actively aiding in political stability. What is highly interesting, is that oil spending is not linked with high levels of military spending, yet oil prices are inextricably linked with violence in the MENA region. Furthermore, violence is heavily linked with increased resource extraction, counterintuitively to normal economic cycle expectations. It is fascinating how a geological resource formed through the fortuitous deposition of seals, source rocks and reservoir so extensively shaped the political and social situation of the MENA region. The middle east is but one of many examples of how impactful geological processes can be over human life and development, how ancient interactions, climates and events hold such widespread influence over modern instances. Oil is what has allowed the middle east to reap benefits from corruption, overturn the resource curse and provide social benefits for its citizens, albeit only through dissent. Intricately shaping the middle east, both in modern times and in the future to come.

References

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