Oil in the Middle East: A critical resource for tourism

Abstract

Recent years have seen very high levels of oil price volatility. From a price of about US$151 per barrel in June 2008 to a low of US$47 per barrel in January 2009, with an increase back to US$120 in April 2011, and a temporary low price of US$29 in January 2016, prices have varied by a factor of over four. At the time of writing, the oil price is still comparatively low at about US$47 per barrel, but a recent decision amongst Organization of the Petroleum Exporting Countries (OPEC) members to reduce production is likely to lead to an increase in prices (Krauss & Reed 2016). Despite low oil prices in more recent years, demand for oil has remained relatively stable, with the International Energy Agency projecting annual growth in the order of 1.1 per cent (IEA 2016). Avoiding ‘rebound’ effects where low oil prices encourage excessive consumption and investment into fossil fuel- intensive technologies is important in light of urgently needed decarbonisation of the global economy to achieve reductions in greenhouse gas emissions towards net- zero emissions by 2050. Furthermore, temporarily low oil prices do not change the fact that ‘cheap oil’ has reached a peak, and future demand will inevitably lead to rising prices (on ‘peak oil and tourism’ see, for example, Becken 2015).