Impact of Oil Industry on Middle East - History Essay Example

Type of paper: Essay

Topic: Oil, Middle East, World, Economics, Discovery, Dubai, Oil Industry, City

Pages: 2

Words: 550

Published: 2021/02/06

Impact of Oil industry on Middle East

The early 20th century is the time period of transformation for the middle east region of the world, and indisputably, the accreditation belongs to the oil industry and the blockbuster revenue it brought into middle-east nations.
However, the oil industry did not witness a boom overnight, rather by the end of 19th century; petroleum supplied only 4% of the world total supply. But as the world economy embarked on a steep growth trajectory, dependence on petroleum grew significantly, and with the discovery of vast oil reserves in various middle east countries, their further utilization and exploration, this part of the world underwent considerable change in its economic as well as social sphere. Thus, in this paper we will peep into the historical events related to oil industry, and how to lead to economic and infrastructural development of middle east nations.

Middle-East regions before oil discovery

It is a well-known fact that prior to the discovery of oil, middle-east was an extremely poor region of the world that was forbidden ecologically and deprived, with very limited agricultural and pastoral economies and a small but locally important caravan trade.” For instance, in Iran (pre-discovery of oil reserves), majority of the population was constituted by the peasants who were living at subsistence earnings by farming on land that belonged to absentee landlord. In addition, their villages were having poor infrastructure with most of the houses made of mud, thus leaving the population exposed to disease and ignorance. On the other hand, a handful of landlords had better facilities as they lived in larger cities that too never had enough infrastructural facilities. Similar was the situation with rest of the middle-east nations, where hardly any modern infrastructure facilities were witnessed just as in the western part of the world.

The discovery of oil and the after-effects

Finally, at the beginning of 20th century, the middle east regions witnessed the discovery of a number of oil reserves available with them. While the initial discovery was made in the inner regions of Iran, the later discoveries sprawled to Saudi Arabia, Kuwait, and Iraq as well. However, the discovery of oil reserves in these nations could do no benefit without the aid of western partners, as only the latter was having people, money and technology to mine and market the oil around the world. Thus, on account of multiple agreements over profit sharing and royalty payments, a massive share of revenue was received by oil rich middle east countries.
Since the mid-20th century time period, middle east nations such as Oman, Saudi Arabia, Qatar, Kuwait, et cetera have utilized the revenue from oil reserves efficiently, and have experienced considerable growth. The Gross-Domestic Product (GDP) of these nations has been peaking consistently, while the rulers are also proposing the increase in the Government expenditure. Beginning with 1960’s, the middle-east governments have channelized the revenue from oil reserves towards public expenditure to uplift the infrastructural and health situation in their respective nations, and have been largely successful so far. The economic growth performance of the middle-east nations in 1960’s was the highest in the world at 6% per worker per year, and even today many middle-east nations records high GDP growth and better infrastructural facilities than some western countries. Such a rapid economic growth in the form of developed infrastructure, new buildings, modernized lifestyle, universities, schools and the overall improved housing conditions can fully be credited to the oil industry.

Citing example of United Arab Emirates (UAE) –Economic and Social Development

While the boom in the oil industry provided equal benefits to the oil-rich middle-east nations, there were only few nations, such as UAE, and in particular the cities like Dubai , that have seen a jaw-dropping change. The GDP of UAE is consistently higher than that of United Kingdom since 1981. Similarly, the city of Dubai has turned itself into a tourist destination and a global hub of lavish real estate investors with some notable projects such as, Burj Khalifa- World’s biggest standing tower, Palm Islands- a man-made residential island city, Dubai Emirates- a high-end 7 star luxury holiday resort, and the list goes on. Thus, we can assert that the discovery of oil, its further export to global market, and productive utilization of revenue from the same source has promoted the economic and infrastructural modernization in the city of Dubai, an example for the rest of middle-east nations. In addition to infrastructural development, UAE has also headed positively in improving the social conditions in the country, which was once struck badly with poverty. Important to note, prior to the exploration of oil reserves, the people of UAE were gripped in the clutches of poverty, however, the rulers of the nation has used large oil revenues to alleviate poverty to a great extent. The two images below speak a lot more than what we are postulating in this paper, as how the oil revenue changed the overall infrastructural facilities in the middle-east nations:
Figure 1:Dubai in 1960
Figure 2: Present Day Dubai


Taking into consideration everything that we have discussed so far in this paper, at the end, we can assert that oil exploration has largely benefited the development of middle east countries as government of each respective nation has productively used the revenues from oil towards economic modernization of their cities and social upliftment of their population. Today, the mid-east towns are ultra-modern and compete with the western buildings in terms of architecture and amenities. Moreover, the society which was once curbed into poverty is now enjoying the luxurious and bon-vivant lifestyle, leaving the old-conservatism approach behind.

Works Cited

Bird, Adam. "The History and Social Consequences of a nationalized oil industry." 2005.
"Dependence on Middle East energy and its impact on global security." n.d.
MALACHOVA, ANASTASIJA. The Middle East and Oil: Economic Modernisation and Political Stagnation. 29 October 2012. 9 April 2015 <>.
Mcqueeny, Kerry. Dubai before the Boom. n.d. 9 April 2015 <>.

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WePapers. (2021, February, 06) Impact of Oil Industry on Middle East - History Essay Example. Retrieved October 03, 2022, from
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"Impact of Oil Industry on Middle East - History Essay Example," Free Essay Examples -, 06-Feb-2021. [Online]. Available: [Accessed: 03-Oct-2022].
Impact of Oil Industry on Middle East - History Essay Example. Free Essay Examples - Published Feb 06, 2021. Accessed October 03, 2022.

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