Abu Dhabi, Currency, Curse of Oil, Dates, Dates selling, Dubai, Global Warming, Gold, Muslims, Oil barrel, Oil price 2014, Oil price collapse, Oil Price Projections, Property Market, Saudi Russia, Sex and the City 2, Skyscrapers, UAE, USA
Oil is a finite resource. It is also unevenly distributed, destructive to the environment and a wildly distortionary factor in the game of global influence. With these things conceded, it becomes easy to understand the impetus behind the search for a renewable replacement.
And while that search is now commonly regarded as a failure – Wind energy, solar power and nuclear technologies have all proven inefficient and if relied upon would ruin the global economy and collapse the Western standard of life – oil is quickly becoming less of a luxury than its producers (and pricers) are accustomed to.
The technology of shale gas extraction – though as environmentally destructive as any other form of fuel – will soon make America, Canada and much of Europe energy independent, free at last from those dubious and self-destructive alliances with the states of the Arabian Gulf.
What will happen to the producing nations when their precious resource no longer sets the pace of the global economy?
The answer will heavily depend on the country considered. Some oil-producing nations never needed to become as dependent on oil as they currently are. Russia for example, could have a modern diversified economy by now were it not for the meddling authoritarianism of the Putin Regime. Venezuela could be enjoying the same relaxed, tourist-driven tranquillity as Barbados or Dominica.
On the other hand, there are nations that have done far better with oil than they should have (or could have) without it. Among these, none risk a sharper and more dramatic fall than those states of the Gulf.
Dubai – that glistening Ballardian nightmare on the Indian Ocean – is the place to watch during this period. Dubai is the Manhattan of the United States of OPEC. And when oil goes down, so do those skyscrapers.
After all, other than tourism, oil and investment, what can Dubai offer? The only answer discoverable online is dates. Like Germany and cars, Japan and electronics, the UAE is apparently the go-to source for those annoying fruits often given as gifts but which nobody has ever liked.
As oil becomes plentiful and cheap, companies in the Gulf will desperately try to plough their funds into blue-chip companies in the West. Real estate within cities like Abu Dhabi and Dubai will be promoted as a piece of tropical paradise for wealth Westerners unimpressed with the sunshine in Monaco and Cannes.
The Gulf regimes themselves will begin to use a different tone in its diplomacy. Gone (or very moderated) will be the haughty superiority they have employed in the past, replaced over time with a panicky and tremulous pleading.
What should the world’s relationship with the Gulf in the long term be – that is, after the age of expensive oil? In my view, it should be measured to match the scant disregard with which they have treated our own geopolitical security in their time of luxury. All the time that oil went for over $100 a barrel, the Saudis felt no anxiety in sponsoring groups dedicated to wiping out their clientele.
When Dubai is reduced to selling Dates, I suggest the West remembers this.