Cupid Oil Essay

Cupid Oil Essay

… in the Middle East, one can easily imagine the shock waves running through U.S. political and business circles when Iraq grabbed Kuwait. Iraq tried to justify the seizure of Kuwait on the grounds that the latter was guilty of economic aggression against Iraq – a perception that was widely shared in the Arab world. Besides the issues of Iraqs access to the Gulf and the terms of repayment of its debt to Kuwait incurred during the Iranian-Iraqi war, the key point of dispute in the 1989 to 1990 period was the price of oil. The factors determining oil prices after 1985, and, in particular, between 1989 and 1990, were complex. After peaking in 1981, crude prices fell steadily until 1985, when an OPEC conference in October failed to agree on new export quotas. Saudi Arabia then increased production from 3.2 thousand to 4.8 thousand barrels daily between 1985 and 1986.7 Oil prices plummeted from $27 to $15 a barrel, reaching a low of $7 a barrel. One source claims that the Saudis aimed to cripple Irans economy and to strengthen Iraqs war effort.
Another states that Saudi Arabia wanted to punish other OPEC …

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