Islamic Countries

in Global Energy Politics

Discovered new energy,
nuclear deals of Iran, oil
prices continue to go
down, ISIS phenomenon
and the failure of Arab
Spring, economic defisit
of oil exporter islamic
countries, will be a sign of
new begining of islamic
countries in global energy
politics

TASNIM ILMIARDHI
Energy Legal Practitioner
Jakarta, Indonesia
tasnim.ilmiardhi@yahoo.com

2015

Islamic Countries in Global Energy Politics

By:
TASNIM ILMIARDHI
Energy Legal Practitioner
Jakarta, Indonesia
tasnim.ilmiardhi@yahoo.com

I. Introduction
Geographically, Islamic countries are at various peninsula and
stretches from Indonesia to Morocco. It has been since along time
ago, Islamic countries active in economy of the world, especially on
the Silk Road, as well as a potential market. After the collapse of the
Turkish Ottoman Emporium, practical Islamic countries become
unconsolidated well in politics and the global economy.
In energy sector, Islamic countries in the Middle East (Persian Gulf
and the Caspian Sea) have 49% of world oil reserves. For the
countries of Saudi Arabia has 60% of world oil reserves. With an
average rate of exploitation as it is today, then Saudi Arabia's
reserves can be exploited up to 125 years, Kuwait 144 years, Iraq 98
years, United Arab Emirates 120 years. Countries that own and
control the source of energy, will have a strategic role in the political
map.

World Energy Reserves

No
1
2
3
4
5
6
7
8
9
10

Country
Venuzuela
Saudi Arabia
Canada
Iran
Iraq
UAE
Rusia
Amerika
Qatar
China

Oil
(billion barrels)
297,6
265,9
173,9
157
150
97,8
87
35
23,9
17,3

Gas
(trillion cubic feet)
196,4
290,8
70
1.187,3
126,7
215,1
1.163
300
885,1
109,3

Coal
(million ton)
479

Nuclear

NPP
6.582
NPP, R&D

157
237,3
11.450

NPP
NPP & ICBM
NPP & ICBM
NPP

British Petroleum Statistic 2013 & IAEA

Sources of energy, particularly oil and natural gas, a commodity that is contested by many countries.
Not a few conflicts between states are triggered by the problems in the energy resource needs.
Islamic countries in the Middle East to source energy as an issue to keep the country's bargaining
position. Russia uses energy issues to maintain influence over Eastern European countries former
Soviet Union, as well as a supplier of 50% of the EU's oil and gas.
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TASNIM ILMIARDHI

II. Allied with Iran

Achieving agreement on nuclear technology and the lifting of economic sanctions Iran, will have an
impact on the political map of the strength of Islam, the price of energy and the global economy.
Iran negotiating process with the six-nation nuclear authorities led by the United States,
States has
successfully completed the relevant treaties of nuclear technology in the city of Vienna, Austria, on
Tuesday (07/14/2015). Iran as a country with a Shiite majority, agreed to have nuclear technology
for peaceful purposes. Accordingly,
Accordingly economic sanctions since 2012,, addressed to Iran has ended.
With the lifting of economic sanctions that
have been imposed upon Iran,
Iran enabling
Iran to return to the player of the world
economy and export of goods, including oil
and gas. Iran has signaled his intention to
return to the global oil market,, by trying to
maximize the capacity of crude oil exports
to Europe, if Iran's official entry into the
world oil market, it is likely the price of oil
and natural gas will be much lower than
now. For 2015 alone, already abundant
supply of crude oil and the demand
continues to fall which made the prices
continue to fall.

Oil Reserves of Iran

10%
Iran
Non Iran
90%

Iran's nuclear mastery is not just a prestigious project, but based on the needs and abilities. Iran has
a stable position in politics and economics. As an oil-producing countries, Iran does not have a
dependency exploration by western countries.
countries This is very different from Saudi Arabia and Kuwait.
Iran is a superpower in terms of energy. Iran has oil reserves that have been proven by 10% of world
oil reserves, and gas as much as 15% of the world gas reserves. As an oil producer,
producer Iran's oil
production is in the second position in OPEC and is in fourth position in world oil production. In
addition, Iran has the independence politically, either among the Middle Eastern countries,
countries as well
as Western countries.

III. Oil Prices Continue to Go Down

In 1992, the state Saudi Arabia is the world's largest oil producer, and the United States as the
world's biggest oil consumer. Between both countries, there has been a cooperative relationship
that has existed for a long time.
The return of Iran as the world energy actors, could endanger oil producers, because there will be
more oil in the market. In addition,
addition when the oversupply of oil, OPEC (Organization
Organization of the Petroleum
Exporting contries) will find a market.
market Market imbalances will depress oil prices,
prices for the period until
the medium term.

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10 Largest Oil-Producing Countries

No

Country

1
2
3
4
5
6
7
8
9
10

Rusia
Saudi Arabia
United States of America
China
Iran
Canada
UEA
Venezuela
Kuwait
Iraq

Production
544 Mt
520 Mt
387 Mt
206 Mt
186 Mt
182 Mt
163 Mt
162 Mt
152 Mt
148 Mt

Percentage
13%
13%
9%
5%
4%
4%
4%
4%
4%
4%

International Energy Agency (IEA) 2012

World energy prices, especially oil and gas, will continue to decline. After the United States
discovered shale gas (natural gas trapped in formations crack rocks) a few years ago, could reduce
the dependence of the United States to the countries of the Middle East for its oil and gas needs.
This of course makes the production and supply of oil and gas the Middle East countries become
redundant.
The discovery of new energy sources, and supplemented if Iran release its oil and gas production to
the global market, in accordance with the laws of market economy between the demand and supply
of oil and gas reserves, will make the price of oil and natural gas is getting down.

IV. Rejecting Saudi Arabia and Pressing to Russia

Economic deficits of Saudi Arabia

World oil prices continue to decline, will depress the economy of Saudi Arabia. 80% of Saudi Arabia's
state revenue comes from oil sales, and international oil prices continue to decline, while state
funding remains high. Even to cover the budget deficit, Saudi Arabia has to borrow money or incur
debt of $ 4 billion through the issuance of bonds in 2014 ago.
Arab government bond is the first in the last eight years, the Government of Saudi Arabia has never
issued bonds since 2007, and was an attempt to maintain the level of public spending as oil prices
continued to decline.
As previously stated Governor Saudi Arabian Monetary Agency, Fahad al-Mubarak, that the Saudi
government will use a combination of bond and foreign exchange reserves to maintain spending and
cover the financial deficit will be greater than expected. The country continues to hope that there is
an increase in lending for 2015 to $ 5 billion. Until the end of 2015, the state of Saudi Arabia would
have a budget deficit of 20%.
State expenditures for special projects, payment of bonuses for civil servants and military Arabia
recognized funding will increase the weight of Saudi Arabia's economy and continuing to reduce the
financial capacity of the state treasury that eventually eroded international reserves. War against
Yemen and Syria trigger an increase in the military budget from 10% to 17% of the Gross Domestic
Product (GDP).
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To meet the needs of the planned expenditure, Saudi Arabia requires oil prices at a price of USD 105
per barrel. While the average world oil price is currently only USD 44 per barrel. If the economic
government of Saudi Arabia continues like this it will deplete reserves faster than expected.

Reserves of World Oil by Region

1%
7%

Europe
Middle East

20%

Africa
Asia & Oceania

49
%

North America

13%

Central & South America

Eurasia
8%

3%
US Energy Information Administration-2013

The discovery of new energy sources that are cheaper and the inclusion of Iran as an oil supplier
countries in the global market, making the dependence of the world oil consumer countries to be
reduced. Energy consumers who dominated countries of the west, of course, there is the possibility
of critically will see Saudi Arabia as the world democratization major obstacle, the system of
absolute monarchy is not democratic, social systems that greatly inhibit the role of women, and has
a network with radical groups. A signal to be conveyed that the western countries would dispose of
Saudi Arabia in the global political stage.

Economy Depressed of Rusia

On the other hand, as the country as a stabilizing force in the economic, political and military.
Russian state has one of the super power, including in terms of supply and energy production
capacity, either oil, gas, coal and uranium.
The lifting of economic sanctions Iran adversely affect the Russian economy, particularly the oil and
gas industry. Exports of Russian oil and natural gas to Europe which has been the backbone of the
Russian economy will experience a serious threat. Decline in world oil prices and the lifting of
economic sanctions Iran will press the Russian economy.

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ion of
Oil Production
Rusia
Rusia

Non Rusia

European oil companies,, especially in the

Mediterranean market are eager to conduct
exploration and production in the country of
Iran, and are eager to continue the business
relationship there. In the short term Europe will
buy crude oil from Iran who have better access
to the global energy market and beat the Russian
energy companies and Iraq.

13%

87%

For western countries who are consumers of

energy, pressing Russia will benefit with reduced
Russian dominance over Eastern Europe.
Emergence of Iran in global oil producers will
reduce Europe's dependence on Russia for
energy supply of oil, and obtain cheaper oil
prices.

International Energy Agency (IEA) 2012

V. Competition of Islamic Regime

Middle East region is dominated Islamic countries is an area that is considered as the center of world
conflict. The high level of conflict in the Middle East countries, under certain conditions to be very
helpful (in spite of the conflict must been created intentionally
intentionally or not) for hegemony in the region in
order to gain economic, social, political, military and ideological.
Iran as a country with a Shiite majority, agreed to have nuclear technology for peaceful purposes.
The emergence of Iran as a country with a majority Shiite country's nuclear authorities and returned
as global economic players in the field of energy, will increase the competition among Islamic
countries, which affects the power escalation of Islamic countries.
During this state supporters of Saudi Arabia following the majority Sunni and Wahabi, more
dominant to give color to the economic and political escalation in the Middle East. As the
superpower United States with a capacity of oil and gas consumption in the world, America has a
high dependence
ndence to Saudi Arabia to meet the energy needs of the country.
Not a bit of competition that led to the conflict between the Middle East countries, which are
triggered by several factors, including:
1. Boundary and occupation of territories: caused by (i) natural factors with desert conditions
susceptible and become a classic problem (ii) policy factors that triggered the demographic
conditions.
2. The religious and political ideology: the Middle East is the center of religious development
and has a complex repertoire
pertoire in religious thought. Iraq-Iran
Iraq Iran conflict is a form of religious
ideology and political competition.
3. Natural resources: the seizure of oil and natural gas resources is fairly dominant trigger for
conflict between Islamic countries Middle East. Oil potential in the region reached 49% of
the world's oil needs. Conflicts caused by competition over oil resources, will usually trigger
a global conflict. Iraqi military aggression to Kuwait and US military aggression on Iraq, is the
embodiment of the control
control of oil resources and infrastructure as well as access to global
distribution.

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VI. ISIS and the failure of Arab Spring

At the end of 2010, the Middle East region to experience the 'Arab Spring', where the political
situation of the Islamic countries which have a majority of authoritarian rulers hit by a wave of
revolution to demand leadership succession.
Protests, civil disobedience, revolution and rebellion and civil war are actions that characterize a
wave of Arab Spring in the Middle East. The phenomenon is caused by several factors, either
partially or accumulation, which are increasingly worse economic conditions, authoritarian
leadership, government corruption, human rights abuses, poverty and unemployment, as well as
sectarian.
Egypt, Yemen, Tunisia, Libya is an Islamic countries in the Middle East were hit by the Arab Spring
that led to the change of leadership, either constitutional or unconstitutional, even of them ended
tragically with the death is tragic.
Syria and Bahrain is a country that experienced the revolt. Jordan, Kuwait, Lebanon, Oman and
Morocco to reform in the government and the country to adjust the wave of political change in the
Middle East region.
Algeria and Iraq does not escape from the rallies with almost the same purpose. Especially for the
Syrian state, the condition turns into a never-ending chaos, and even escalation of conflicts turn into
increasingly widespread.

Middle Eastern countries hit by the Arab Spring

No

Country

Egypt

Yemen

Tunisia

Libya

Bahrain

6
7
8
9
10
11

Jordan
Kuwait
Lebanon
Oman
Morroco
Syria

12

Iraq

Incident
Demonstration,
Civil Disobedience
Demonstration,
Civil Disobedience
Demonstration,
Civil Disobedience
Demonstration
Rebellion
Civil War
Demonstration
Rebellion
Demonstration
Demonstration
Demonstration
Demonstration
Demonstration
Demonstration
Rebellion
Civil War
Demonstration

Impact
President Hoesni Mubarak on trial
Government changed
President Ali Abdullah Saleh handed over power to
Vice President
President Ben Ali was overthrown
Government changed
Libyan leader Muammar Gaddafi was shot dead
Governments changed
Governments changed
Government remodel
Government remodel
Government remodel
Changed Constitution
Changed Constitution
The President does not change
Government remodel
ISIS
Government remodel
ISIS
various sources

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Action in Syria triggered by protests against the government of As'ad, but on the other hand also
appeared to support government action. The action led to armed conflict of interest groups and the
state to interfere in the armed conflict, both politically, economically and militarily. Syrian civil war
as a result of wave action.
The emergence of ISIS (Islamic State of Iraq and Syriah) in the Syrian conflict, escalation of
widespread conflict, a conflict that is increasingly a period of time, an accumulation of factors that
cause conflicts and interests of the parties involved in the conflict. Iran and Russia provide support
to the Syrian government, while the United States and Saudi Arabia are more aligned to the
opponents of the Syrian government.
No doubt some countries are drawn into the conflict, should be assumed to have a desire for control
of energy resources of oil and natural gas, including in this case, access to infrastructure and the
economy, as well as other interests such as, political, military and sectarian.

VII. Islamic Countries and Control of Nuclear

Nuclear energy is an alternative energy source that allows the realization of world energy
consumption efficiency. Nuclear energy is the primary means to reduce global warming, the use of
nuclear energy should be avoided only if it poses a threat to the life expectancy of beating the
benefits that would be given to humans. In politics, as the nuclear balance of power over the country
economically inferior to the state economically superior.

Islamic Countries which have nuclear facilities

COUNTRY

UTILIZATION

PAKISTAN

military

IRAN

R&D
NPP
nuclear enrichment
facility

ARAB SAUDI

REMARK

3 NPP
1000 MW

since 1972
since 2007
believed to be able to develop a nuclear
weapon in a short time

NPP

suspected to have nuclear facilities and

nuclear weapons in secret

4 NPP
4000 MW

since 1950
Infrastructure ready
2014 operated

KUWAIT

4 NPP
4000 MW

beroperasi 2022
Cooperation with France

TURKEY

4 NPP
10000 MW

Cooperation with Korea

UEA

4 NPP
5600 MW

Will be operated in 2017

Investment US$ 40 billion
Reactor PR1400

JORDAN

2 NPP
1000 MW

since 2015
Cooperation with : Rusia, France, Japan,
and Canada

INDONESIA

R&D

various sources

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Pakistan, in current de facto an Islamic state has recognized and capable of producing nuclear
weapons. Mastery recognized nuclear state Pakistan has been able to produce nuclear weapons.
In the Middle East after Iran agreed country to have nuclear technology for peaceful purposes, the
state of Saudi Arabia and Israel is suspected to have nuclear facilities and nuclear weapons in secret.
Saudi Arabia and Israel refused to be called has had a nuclear weapons facility, and Pakistan denies
helping build a nuclear facility of Saudi Arabia.
Iran even at the stage of research and development as well as a nuclear enrichment facility,
however, if it is not due to embargo that afflict this country, Iran is believed to be able to develop a
nuclear weapon in a short time.
Although it was not until the development of nuclear weapons facility, Islamic countries already
planned and has built nuclear facilities for peaceful purposes. Some of these Islamic countries in the
Middle East is oil-rich region. They have anticipated when oil resources run out and not be a source
of state revenue.

***

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