review: oil in the middle east. 1. why was the middle east’s location so important to european...
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Review: Oil in the Middle East
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1. Why was the Middle East’s location so important to European nations in the nineteenth century?
• Trade routes• Strategic military locations• Raw materials (oil)
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2. What is an oil concession?
• Giving up the rights to oil resources in exchange for money
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3. Why was Persia so willing to sign an oil concession?
• In need of money
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4. Why did demand for oil grow in Europe and America?
• WWI oil-powered ships, planes, and vehicles• Increase in automobile sales in the U.S.
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5. What was the “Big Seven”?
• Western oil companies:– Exxon– Gulf– Etc.
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6. When did Middle Easterners gain greater control over their governments and resources?
• 1950s
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7. What country’s oil concession showed the Middle East that it was possible to
create more equal oil concessions?• Venezuela
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8. What does OPEC stand for? Why was it formed?
• Organization for Petroleum Exporting Countries
• Formed to gain greater control of production and price of their oil
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9. What significant event occurred in 1973? What impact did it have?
• World demand for oil > supply of oil• U.S. supports Israel in 1973 Arab-Israeli War• OPEC declares oil embargo against U.S.
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10. What is an embargo?
• Ban on trade with U.S.• Oil supplies reduced• 1-2 hour lines for oil
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11. What factors led to OPEC’s decline in the 1980s? (Name two)
• Non-OPEC country oil production increased• Conservation effort, so demand decreased• Agreed to sell at same price, then broke
agreements