1.

Saudi Arabia
Saudi Arabia produced more than 11.6 million barrels of oil per day in 2014, nearly 12.5% of
world output or about one out of every eight barrels. The country ranked as the world's
biggest oil producer in the decade from 2003 to 2012, after which it fell to second place due
to surging oil production in the United States. Saudi Arabia remains the world's largest
petroleum exporter. With proven oil reserves of about 266 billion barrels and relatively
low production costs, Saudi Arabia should maintain its position as a top-three oil producer
for the foreseeable future.

Saudi Arabia's oil and gas industry is controlled by Saudi Aramco, which is itself controlled
by Saudi Arabia's Ministry of Petroleum and Mineral Resources and the Supreme Council
for Petroleum and Minerals. Saudi Aramco is not publicly traded. Although international oil
companies do not participate in oil production in Saudi Arabia, several companies partner
with Saudi Aramco in joint-venture refineries and petrochemical plants in the country. These
partners include Exxon Mobil Corporation, Royal Dutch Shell plc, Sumitomo Chemical Co.,
Ltd. and Total S.A.

2. United Arab Emirates

The United Arab Emirates (UAE) is a federation of seven emirates, including Dubai and the
capital of the federation, Abu Dhabi. UAE produced nearly 3.5 million barrels of oil per day
in 2014 to rank as the world's sixth-biggest producer. Each of the seven emirates controls
oil production within its borders. However, Abu Dhabi is home to about 94% of the proven
oil reserves in UAE territory and, thus, it has an outsized role in establishing the federation's
oil policy.

The state-owned Abu Dhabi National Oil Company (ADNOC) controls oil production
operations in Abu Dhabi under the direction of the emirate's Supreme Petroleum Council.
Most oil production in Abu Dhabi is organized under production-sharing agreements
between ADNOC and international oil companies. Other emirates utilize similar production-
sharing agreements and service contracts to organize oil production. Some of the biggest
international companies involved in UAE oil production include BP plc, Royal Dutch Shell
plc, Total S.A. and Exxon Mobil Corporation.

3. Iran
Iran produced about 3.4 million barrels of oil per day in 2014, the third consecutive year of
depressed production. Prior to 2012, Iran produced more than 4 million barrels of oil per day
for eight consecutive years. Most of the recent production downturn can be attributed to the
effects of international economic sanctions placed on Iran during this period. According to
the U.S.Energy Information Administration (EIA), sanctions have had especially severe
effects on upstream oil and gas investment, including numerous cancelled investment
projects.

In July 2015, Iran came to an agreement with the permanent members of the U.N. Security
Council and Germany on the Joint Comprehensive Plan of Action (JCPOA), in which Iran
agreed to strict limits on its nuclear program in exchange for the removal of international
economic sanctions. As of September 2015, implementation of the agreement on Iran's part
is expected no earlier than the first half of 2016. Once Iran has met all of its initial
obligations with respect to the JCPOA, sanctions are to be lifted.

Oil and gas production in Iran is controlled by the state-owned National Iranian Oil
Company (NIOC) under the direction of the Supreme Energy Council. While the Iranian
constitution bans private or foreign ownership of the country's natural resources,
international companies have historically participated in oil exploration and development in
the country through buyback contracts, a contract model that does not convey equity rights
to the international company. According to the EIA, Iran is in the process of developing new
oil contract models to attract foreign investments once sanctions are lifted. Other reports
suggest Iran plans to invite a number of international oil majors to do business in the
country, including ConocoPhillips Co., Exxon Mobil Corporation, Royal Dutch Shell plc and
Total S.A., among others.

4. Iraq
Iraq produced nearly 3.4 million barrels of oil per day in 2014, just a few thousand barrels
per day fewer than Iran. The country has achieved production gains in every year since
2005, two years after the start of the Iraq War. Production in 2014 was higher than any
other year since at least 1980, when the country produced just more than 2.5 million barrels
per day. The EIA reports that ambitious development plans are in place to increase oil
production in Iraq to as many as 9 million barrels per day by 2020. However, the country
faces numerous challenges that could limit progress toward these goals, including political
instability, continuing violence and inadequate infrastructure.

Oil production in most of Iraq falls under control of the Ministry of Oil in Baghdad. The
Ministry operates through several state-owned companies, including the North Oil
Company, the Midland Oil Company, the South Oil Company and the Missan Oil Company.
In the autonomous Kurdistan region of Iraq, oil production is controlled by the local Ministry
of Natural Resources. Well more than a dozen major international oil companies are
involved in Iraqi oil production. U.S. and European oil majors include Exxon Mobil
Corporation, Occidental Petroleum Corporation, BP plc, Royal Dutch Shell plc and Total
S.A. Other international oil giants in Iraq include China National Petroleum Corporation,
known as CNPC; China National Offshore Oil Corporation, known as CNOOC; Malaysia's
Petroliam Nasional Berhad, known as Petronas; and Gazprom Neft OAO.

5. Kuwait
Kuwait produced almost 2.8 million barrels of oil per day in 2014, placing it just outside the
top 10 oil producers in the world. It has maintained consistent production of between about
2.5 million and 2.8 million barrels per day for more than a decade. However, according to
the EIA, Kuwait has been struggling to raise production to 4 million barrels per day during
this period, falling short due to inadequate foreign investment and related delays in new oil
production projects.

The Ministry of Petroleum carries out oil policy in Kuwait through the state-owned Kuwait
Petroleum Corporation and its subsidiaries. International oil companies have long been
denied access to Kuwait because the Kuwaiti constitution does not allow foreign companies
ownership stakes in Kuwaiti natural resources, or the revenues associated with those
resources. This means standard joint ventures and production-sharing agreements used in
other countries are outlawed in Kuwait.

In 1988, the Ministry of Petroleum spearheaded a plan to increase oil production in Kuwait
by attracting international operators through the use of incentivized contract models
allowable under the constitution. However, the country's National Assembly, which is
responsible for approving all such contractual agreements, is not fond of the program and
has delayed its implementation for years.
OPEC
Abbreviated for Organization of Petroleum Exporting Countries, OPEC provides a get-
together among oil exporting countries. Where there’s oil, there’s controversy. OPEC
has set a ceil (a quota) for every member state to export oil. That is, state X can not
export more than Y million barrels a day. So the supply from OPEC is sustained – even
when you are queuing along the petrol stations. In fact, the reason why you queue
along is, some might say, because of OPEC. In 1973, it stopped supply to West
resulting in fourfold increase of oil prices.

OPEC has decided against cutting the amount of oil it produces despite a glut
in global supplies, triggering a five-dollar collapse in crude prices.

The cartel pumping out one-third of the world's oil opted to stick by its output
target, even after prices have plunged by 35 percent in value since June.

The 12-nation cartel "decided to maintain the production level of 30 million

barrels per day" where it has stood for three years, the Organisation of
Petroleum Exporting Countries said in a communique.

It seems likely that there was substantial disagreement between those members of
OPEC, such as Iran and Venezuela, who had been calling for output cuts, and the Gulf
members who are in stronger financial positions.

Tom Pugh, analyst

OPEC Secretary-General Abdullah El-Badri said the cartel would sit tight
before the next output meeting scheduled for June in Vienna, where it is
headquartered.

"We have to wait and see how the market will settle," he told the meeting's
closing press conference.

"As I said many times... we don't want to panic."

Going into the latest meeting, OPEC faced pressure from its poorer members,
notably Venezuela, to cut output as collapsing prices slashed their precious
revenues.
However, its powerful Gulf members rejected calls to turn down the taps
unless they are guaranteed market share in the highly competitive arena,
particularly in the United States, where a flood of cheaper oil from shale rock
has contributed to the global oversupply.

"We should withdraw the overproduction from the market," Venezuelan

Foreign Minister Rafael Ramirez told reporters ahead of Thursday's outcome.

The OPEC decision sent world oil prices tumbling to fresh four-year lows. New
York's West Texas Intermediate for January slumped to $67.75 a barrel - the
lowest level since late May 2010.

London's Brent North Sea crude for January delivery nosedived to $71.25 -
also a four-year trough.

OPEC "may have come to the conclusion that a period of lower oil prices could
potentially work in the group's favour over the longer term, given the boost it
should provide to the global economy and hence to demand", Tom Pugh,
commodities analyst at Capital Economics research group, told the AFP news
agency.

"Nonetheless, it seems likely that there was substantial disagreement between

those members of OPEC, such as Iran and Venezuela, who had been calling for
output cuts, and the Gulf members who are in stronger financial positions."

New president

Crude prices are being depressed also by a strong dollar and worries about
stalling energy demand in a weak global economy.

The International Energy Agency (IEA) recently warned that the "price rout"
was not over, and that crude futures would slide well into 2015.

Plunging oil prices have fanned concerns about the growing threat of deflation
in the world economy, and particularly in the eurozone.

Ahead of the meeting, OPEC kingpin and world's top oil producer Saudi
Arabia cut charges for US customers in a move seen as a bid to maintain its
market share amid increasing competition there from shale energy.

OPEC has meanwhile insisted that it is not solely up to the cartel to tackle the
oversupply that is sending crude prices crashing.
On Thursday, the cartel appointed Nigeria to its rotating presidency for 2015,
meaning the country's oil minister Diezani Alison-Madueke becomes OPEC's
first female president.

The stunning fall in oil prices, from a peak of $115 per barrel in June 2014 to
under $35 at the end of February 2016, has been one of the most important
global macroeconomic developments of the past 20 months. The sharp fall is
broadly similar in magnitude to the decline in 1985-1986, when OPEC
members reversed earlier production cuts, and in 2008-2009 at the outset of
the global financial crisis. Understanding the underlying causes of price drops
is essential to interpreting their macroeconomic effects. The 1985-86 decline
was mainly supply-driven, while the drop in 2008-2009 was almost entirely
due to a collapse in demand. The recent price decline appears to be a mix of
the two.

Slowing growth in emerging markets, most importantly in China, has led to

sharp drops in commodity prices almost across the board. The drop in oil
prices, however, has been significantly steeper than in metals and food. The
magnitude of the differential is one important metric that suggests that rising
supply has been at least as important as falling demand; most mainstream
macroeconomic models suggest that the effect on global GDP has been a net
positive, on the order of 0.5%. This is significant, but less than past
experience might have suggested, though the effect may prove larger if the
decline persists.
There appear to be three reasons for this lower impact on global GDP.

First, although the oil price decrease has been largely passed on to
consumers in advanced countries, there has been much less pass-through in
the rest of the world. Many governments – for example, in China and India –
have taken advantage of the decline to reduce subsidies on fuel consumption
and thereby strengthen their fiscal position.

A second reason is that, normally, a supply-driven oil price decline raises

world demand by transferring resources from high-saving oil producers to
consumers with a higher propensity to spend. This channel, however, has
been muted, as major oil producers have faced pressures to increase
spending, and as consumer countries continue to repair balance sheets from
the financial crisis.

Third, the collapse in oil prices has led to a major short-term drop in
investment in the oil industry, with global investment in production and
exploration falling from $700 billion in 2014 to $550 billion in 2015, with spill-
over to energy commodities. Sharp declines in investment in other commodity
sectors have also contributed to overall slow global growth.

There is no question that the oil price decline has been a significant
contributor to the financial market volatility of the past year. Can the impact
worsen? A primary concern is the a cycle of deteriorating financing conditions
for oil companies and oil exporters. Countries that are heavily dependent on
remittances from citizens working in oil economies are also at risk. So far,
exchange rate flexibility and (for some countries) a large cushion of hard
currency reserves have helped in avoiding an outright financial crisis. But if
the low price is sustained, important oil producers will become increasingly
vulnerable if they are unable to make the requisite fiscal adjustments to a
lower price trajectory. The recent episode underscores that over the longer
term, it is important for oil exporters to diversify their economies and sources
of fiscal revenue in order to decrease vulnerability to oil price volatility.

For oil-importing advanced economies, the price decrease is a welcome

stimulus, and provides an opportunity to strengthen fiscal resilience against
capital outflows for many emerging markets. It is a clear boon for Europe and
Japan, albeit more mixed for the United States which is both a large consumer
and a large producer. Regardless, it is important for policy-makers to continue
policies that strengthen the long-term growth potential of their economies.
Although futures prices suggest that oil prices will rise only moderately over
the next four years (to just over $47 as of Feb 21, 2016), it is important to
prepare for the fact that oil prices can rise in the future just as sharply and
unexpectedly as they have fallen in the past.

https://en.wikipedia.org/wiki/List_of_modern_conflicts_in_the_Middle_East