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Petroleum / Crude Oil:

Petroleum / Crude Oil Oil from SW Asia

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Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil ) or crude oil , sometimes called black gold . It is a thick, dark brown or greenish liquid. Petroleum exists in the upper strata of some areas of the Earth's crust. Petroleum is used mostly, by volume, for producing fuel oil and gasoline (or petrol), both important "primary energy" sources. Petroleum is also the raw material for many chemical products, including solvents, fertilizers, pesticides, and plastics.

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Petroleum is a NON-RENEWABLE resource. It is found inside the earth and must be pumped out. It takes millions of years for it to be created, which is why it is considered NON-RENEWABLE.

Fuels that are NON-RENEWABLE are sometimes called FOSSIL FUELS. This is because they are thought to be created from the remains of dinosaurs. :

Fuels that are NON-RENEWABLE are sometimes called FOSSIL FUELS . This is because they are thought to be created from the remains of dinosaurs.

How much is there??:

How much is there?? World reserves stood at 1,042,536 million barrels; world demand was about 76 million barrels per day. At this rate, the oil will last about 38 years. (1,042,536 million barrels in reserve / 76 million barrels consumed per day = 13,718 days worth of oil left; 13,718 days / 365 days in a year = ~38 years worth of oil left.)

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SW Asia has almost 2/3 of the world’s remaining supply of crude oil.

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The United States is a DEVELOPED COUNTRY. This means it has lots of technology and lots of industry to make products. This technology means that the U.S. is heavily dependent on PETROLEUM , the source of much of our energy.

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The U.S. uses petroleum to make fuel for various energy uses.

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Because SW Asia has crude oil, countries there are important trade partners for the United States.


OPEC OPEC - Organization of Petroleum Exporting Countries. In 1960, many oil-rich nations joined together to control the price and production of oil. They did this to stop competition between them from lowering the prices they were getting from buyers.

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I Want to buy petroleum…who wants to sell it to me? And how cheap can you go?? I can sell it for $30.00 a barrel!! I can sell it for $25.00 a barrel!! I can sell it for $20.00 a barrel!!

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Now…instead of many sellers all trying to sell to the buyer and having to offer lower prices to win the sale…OPEC as a group sells the oil for a price that has been agreed to by all its members.

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I Want to buy petroleum…who wants to sell it to me? And how cheap can you go?? We will sell it for $35.00 a barrel…and that’s the best you can get. All buying countries now negotiate with OPEC…and they all have to pay the price that OPEC has decided to charge.

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OPEC meets 2 times a year to set prices for the petroleum it will sell the world. Members agree to follow this price, and they also agree to only produce as much oil as the group has decided to produce. In this way OPEC controls the supply of oil that is available.

OPEC members…:

OPEC members… Original Members : Iran Iraq Kuwait Saudi Arabia Venezuela SW Asia nations that joined later: Qatar United Arab Emirates

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Sometimes OPEC has used petroleum as a way to control political events in the world. For example, in the 1970’s the United States was aiding the country of Israel in its battles with the Arab nations around it. OPEC announced an embargo against the United States and ordered its members not to ship any more petroleum there until the support of Israel stopped.

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This embargo caused oil and gas shortages throughout the United States. Prices quadrupled and consumers could only buy limited quantities of gasoline.

How does an oil Embargo hurt??:

How does an oil Embargo hurt?? How would higher gas prices impact the country? Heating your home would cost more money. Shipping of goods by truck would cost more. People couldn’t afford to drive as much. People would have less money for other purchases. Businesses wouldn’t sell as much and would lose money. GDP for the country goes down.

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Fortunately the embargo was lifted within 6 months due to political talks between the US government and the governments of the OPEC members in SW Asia.

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What is Petroleum? What is Petroleum used for? What does NON-Renewable mean? Does the United States have Petroleum? About how long will the world’s current oil supplies last? Where is most of the world’s Petroleum located? Why does the U.S. depend on petroleum? What is OPEC? Why was OPEC formed? How can OPEC influence world politics? Analyze: Saudi Arabia is a major member of OPEC and an ally of the United States. Israel is also an ally of the United States. If the 2 countries declared war with each other and each demanded the support of the United States, what should President Obama do? What are the consequences of your decision? Review

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