ME Oil

Was the oil crises of 1999-2000 different from all others?"

Annual review authored and distributed by Prof. Eliyahu Kanovsky, Bar-Ilan University, internationally respected authority on the economics of Middle East countries recently published his current findings [21 March 2002].

Excerpts follow:


  • There is no shortage of oil on the horizon and long term prices (in dollars) will be approximately stable or with a slight downward trend. (presumes absence of wars or similar political upheavals).

  • None of the Gulf oil states have succeeded in diversifying their economies away from oil; all are trapped into consuming up to 90% of annual revenues.

  • About 150,000 young Saudis enter the work force each year . Some 50,000 find work. Employers prefer Asian workers.

  • In Saudi Arabia extravagance, corruption, and the privileges of a royal family that numbers 30,000, have lead to a national debt of $160 billion, approximating GDP (Gross Domestic Product). Per capita GDP has fallen to one fourth of its 1980 peak.

Saudi Abdalla & co
  • World oil output is rising. Russia's output is rising.

"It is my view that the long run trend of oil prices is downward (inflation-corrected dollars). Barring exogenous oil shocks (wars, revolutions etc.) there is good reason to anticipate ...the long term downtrend in oil prices."

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