AN ECONOMIC ANALYSIS OF ASPECTS OF PETROLEUM AND MILITARY SECURITY IN THE PERSIAN GULF

Duane Chapman and Neha Khanna

Contemporary Economic Policy, 2001, vol. 19, issue 4, 371-381

Abstract: Geologic estimates of remaining global petroleum resources place about 50% in the Persian Gulf. Production costs are estimated at $5 per barrel there and $15 per barrel in the North Sea and Alaska. According to mathematical results derived from depletion theory, the present value of economic rent from oil is on the order of $20 trillion. This article uses game theory to explain the $15–$20 per barrel price band that existed from 1986 to 1999. New economic forces have displaced this previously stable pattern; a new price range of $23–$30 is emerging. International trade in petroleum and conventional weapons are analyzed with econometric methods; the occurrence of nuclear weapons capability in the Persian Gulf region is explored.

Date: 2001
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https://doi.org/10.1093/cep/19.4.371

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Working Paper: AN ECONOMIC ANALYSIS OF ASPECTS OF PETROLEUM AND MILITARY SECURITY IN THE PERSIAN GULF (2000)
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