A millennium ago, around roughly the tenth century, the Middle East was an economically advanced region of the world, as measured by standard of living, technology, agricultural productivity, literacy or institutional creativity (Kuran, 2011). The Middle East has experienced a roller coaster of growth and decline over the last thirty years. The special fact that was the beginning of the economical rise with the discovery of the importance of oil and its significant price increase. The focus of this essay is demonstrate to an audience of business students and future international business conductors how to understand economical facts of the middle east that would bring benefits by understanding the background of the economy on those countries, allowing them to grasp how business are conducted and where to find money. This research concerns the Middle East economy, directed specifically towards the economy of based on the petroleum exporting countries.
In 1973, during the Arab-Israeli War, U.S supported Israel and it irritated several Arab nations, which instituted an oil embargo against the United Stated. A sad coincidence happened during a time where the demand for oil was rising and the domestic crude oil productions were declining. The global production of oil outside the Organization of Petroleum Exporting Countries (OPEC) had minimal excess production capacity and the price increased from $4 to $12 per barrel within 6 months (Department of Energy, 2002). During the dry period, Iran became an important partner of the United States because it was able to compensate the oil exports from Kuwait, leaving the latter offset (Lotfalian, 2009). It changed the pool Kuwait had with the United States (Odell, 1997). .
According to the American Department of Energy, changes were made to ensure minimal turbulence on the domestic market. Fossil fuel was switched for alternative in some electrical and industrial facilities to reduce the necessity of such commodity.