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Nowadays, oil is one of the most important natural resources in the universe. Many industries and development relied upon on oil in the modern world, the latest leap in the world after it was detected. In this paper it will give the definition of oil, different types of oil, where it can be found as well as general view about Saudi economy.
What is oil?
According to http://www.sjgs.com/oil.html "Petroleum is basically a mix of naturally occurring organic compounds from within the earth that contain primarily hydrogen, carbon and oxygen".
According to government of Alberta "Crude oil is a naturally occurring mixture of hundreds of different hydrocarbon compounds trapped in underground rock. These hydrocarbons were created millions of years ago when ancient marine life or vegetation died and settled on the bottoms of streams, lakes, seas and oceans, forming a thick layer of organic material. Sediment later covered this layer, applying heat and pressure that ‘cooked' the organic material and changed it into the petroleum we extract from the ground today."
Crude Oil usually comes as a black liquid; it can be in many forms such as green, red or brown but the black oil is more common than the other. Crude oil is containing of: 85-90% of carbon, 10-15% of hydrogen, 0-1.5% of oxygen, 0.1-3% of sulfur and 0.1-0.5% nitrogen. There are many types of oil such as heavy oil, light oil …
Different types of oil depending on the composition and density
National of oil:
Oil found in specific places around the world, but frequently in the Gulf region in particular. As the reserves of Saudi Arabia are the largest oil reserves in the world.
The Organization of Petroleum Exporting Countries (OPEC). OPEC is an international organization of twelve oil exporting countries.
It has been founded in Baghdad in 1960. By Saudi Arabia, Iran, Iraq, Kuwait and Venezuela. Headquarters in Vienna. The twelve members of this organization now and joined date are:
According to http://www.opec.org/library/faqs/aboutopec/q3.htm
Saudi Arabian economic:
Saudi Arabia's economy is one of the strongest economies of the Middle East. Saudi economy depends on many resources such as agriculture, foreign investment and investments of Saudi Arabia in abroad, but the heavy reliance in the Saudi economy on oil is chiefly.
Since the discovery of oil in Saudi Arabia in 1938 the Saudi economy depends almost entirely on the oil imports up to the present. As we know that oil prices down and change up from time to time and this impacts negatively on the state budget as well as the economy In 2008, following the surge in oil prices and reach above the $ 150 budget rebounded sharply, but this year the price of oil dropped significantly until close to $ 40 and this will be a large budget deficit and the economy.
This paper will show how did the oil prices has affect the Saudi economy by comparing the average of the oil prices with the Saudi budget.
In 1999 the average of the oil price was $27.40 and the Saudi budget was In 2003 the average of oil price was ($27.69) while the budget of the Kingdome of Saudi Arabia was (295.000.000.000 SR).
the average oil price was ($37.41), on the other hand the budget of the Kingdome of Saudi Arabia was (393.000.000.000).
In 2005 the average was ($50.04) in contrast the budget of the Kingdome of Saudi Arabia was (555.000.000.000SR).
In 2006 the average was ($58.30) and the budget of the Kingdome of Saudi Arabia was (655.000.000.000SR).
In 2007 the average was ($64.20) and the budget of the Kingdome of Saudi Arabia was (621.500.000.000SR).
In 2008 the average was ($91.48) and the budget of the Kingdome of Saudi Arabia was (1.100.000.000.000SR).