The political economy of oil depletion

Given the importance that oil covers in our lives and the problem of oil depletion the world is facing, it is very important to understand how to move in this game from now on. In this work there is not only the presentation of the actual situation, in terms of projections, market structure, and economies of oil producers (mainly situated in the region of the Persian Gulf), but also the possible explanation of the productive behaviour of OPEC and of its swing producer Saudi-Arabia, the best oil management to conduct from now on, and the possible implications in terms of distribution of power resulting from oil depletion.

My interest in this issue takes form starting from the Hubbert’s curve. I also present models of oil management. Then I analyze the oil market both on the macro and the micro side, and I present the basic consequences a spike in oil prices could have on the exchange rate market. In the second part of the work I focus on Middle Eastern economies’ situation, studying the causes of their lack of growth, and the possibility they seem to have for growing beyond oil. The core part of the work is the one dedicated to the situation the world is facing since the beginning of 2008, when the price of oil reached, and passed, the level of 100$.

I present a personal explanation of the productive behaviour of Saudi Arabia and of the situation of its basins, trying to show the best productive path to follow in order to have a flow of oil available as longer as possible. In my conclusions I present the possible best management for the resource left, I analyze the global scenario that may occur with the actual and forecasted situation of oil, and its political implications.

ORIGINALLY SUBMITTED AS A MASTER’S THESIS TO THE FACULTY OF ECONOMICS OF THE UNIVERSITY OF MODENA AND REGGIO EMILIA (ITALY) ON APRIL 2008.
Copyright ©2008 Veronica Cinti

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