An Economic Analysis of Petroleum and Military Security in the Persian Gulf

Duane Chapman and Neha Khanna

No 121157, Staff Papers from Cornell University, Department of Applied Economics and Management

Abstract: Geologic estimates ofremainingglobalpetroleum resourcesplace about 50% in the Persian Gulf. Production costs are estimated at $5 per barrel there, and $15 per barrel in the North Sea andAlaska. Using mathematical methods derivedfrom depletion theory, the present valueofeconomicrentfromoilisontheorder of$20trillion. Gametheoryisutilizedtoexplain the $15-$20 per barrel price band that eXistedfrom 1986 to 1999; new economicforces may displace this stable pattern. International trade in petroleum and conventional weapons are analyzedwitheconometricmethods; theoccurrence ofnuclearweaponscapabilityisexplored

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 28
Date: 1999-11
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Persistent link: https://EconPapers.repec.org/RePEc:ags:cudasp:121157

DOI: 10.22004/ag.econ.121157

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