How Uprisings Affect Oil Supplies

As political upheaval spreads across North Africa and into the Persian Gulf, 2011 may turn out to be as momentous as 1971, the year when the nature of the region's petro-states first took shape.

Many of the conditions driving current uprisings across North Africa and the Middle East originated in the establishment of such oil-rich states. "The many domestic factors that have led to the recent turmoil across the region are not going to disappear in 2011. Virtually no oil-producing country in the region has been able to diversify its economy away from oil. Almost all are seeing domestic oil consumption rising rapidly as governments subsidize gasoline, diesel, and power in an attempt to deliver material well-being to their citizens. Cheap energy is critical to the legitimacy of these regimes, making price spikes politically difficult."

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