most of us might look at a map of the
Middle East and think lots of oil after
all almost a third of the world's crude
supply comes from this region over the
past year though a saudi-led strategy by
OPEC to push up production and grab back
market share from US shale oil producers
has had a dramatic effect on oil prices
brent has fallen to nearly thirty
dollars a barrel this week lower
commodity inputs should have some
positive effects on the world economy
particularly upon the largest developed
economies cheaper petrol appears to have
spurred gasoline demand in the US the
world's largest consumer on average up
nearly four percent last year now the
bad news is what rising OPEC production
could do to demand in oil exporting
countries themselves case in point the
Middle East more than nine percent of
world oil consumption as you can see
here and notice the change over the
period from 2000 now Saudi Arabia's
economy has begun to feel the effects of
this and has begun to suffer this year
economic output will grow at the slowest
pace since 2009 according to credit
suisse a budget deficit looms of fifteen
percent of gdp as a result Middle
Eastern oil demand could suffer this
region consumed nearly 9 million barrels
per day in 2014 according to BP mostly
from Saudi Arabia Iran and the UAE China
the world's number two consumer uses 11
million barrels of daily at seasonal
peaks well over 1 million barrels per
day are burnt just to generate
electricity in the middle eastern region
so any economic slowdown should lead to
less power output and less oil demand
and this regional demand is significant
in the decade to 2014 consumption there
expanded at a faster pace in percentage
terms than any other region including
asia-pacific in terms of barrels per day
the Middle East oil demand growth
compares with the two largest consumers
as you can see here meanwhile Saudi
government revenues are down enough that
the ministers are even considering
privatizing its state oil company
emco cuts to fuel subsidies will raise
costs to consumers too late last month
petrol jumped by two-thirds in Saudi
Arabia although petrol remains extremely
cheap they're still even the UAE has
also had to cut subsidies last summer
the bear market in oil is likely to hurt
oil-producing economies which in turn
will diminish overall oil demand the
Middle East is not just about oil supply
you