Comparative analysis of gulf cooperation council oil market with the organization of petroleum exporting countries in the 21st century

Abstract

The discovery of petroleum oil in Persian Gulf for over seventy years has seen to the exports of much crude oil, which served as the major foreign revenue earner for Gulf Cooperation Countries (GCC). In view of continuous increase in domestic consumptions, GCC had to evolve deliberate policies of domestic refining and processing of some of their crude oil locally to meet up with the expanded demand for refined oil and petroleum products by their societies. In spite of the building of many refineries by individual members of the group, the GCC paradoxically found itself as a major importer of refined oil and other petroleum products from foreign countries that are buyers of its crude oil. The underperformance of Gulf Cooperation Countries in terms of refining of oil and processing of petroleum products is largely attributable to royalty and to some extent leadership failures; where those that ruled and are still ruling these countries, lack visions. Hence, when there is hiccup in the home countries of the refiners, it automatically translates to disequilibrium for the economies of the GCC members. It is because of this inability of GCC countries to take advantage of their dominance of OPEC to leverage on their refining capacities and the processing of petroleum products to meet up with the region’s local consumption needs and generate more employment and empower greater numbers of their citizens that forms the motivation for this study. The study is a qualitative one where data was generated through secondary sources such as academic journals, bulletins, textbooks, scholarly papers, and internet materials. Data was analyzed through descriptive and explanatory method.