When Oil Wells Run Dry

Despite being flush with petrodollars and riding high given soaring energy prices, leaders from the Arab Gulf States—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—are rushing to diversify into industries unrelated to energy, according to recent reports by McKinsey Quarterly, the publishing arm of consulting firm McKinsey & Co.

“The clock is ticking” because of dwindling oil reserves in Bahrain, Dubai, and Qatar, according to McKinsey. This situation exerts pressure to develop non-energy sectors to create jobs for a growing population.
Experts estimate that Bahrain will be the first Arab Gulf nation to run out of oil, in approximately 10 or 11 years, closely followed by Dubai in a little more than 11 years. Qatar is estimated to have 15–20 years of oil reserves.

The question is, will the Gulf States be able to overcome the limitations and constraints imposed by religious tensions, distrust of the West, dislike of multinational corporations, and an aversion to reforms needed to “break away from the boom-and-bust cycles that volatile energy prices create?”

“How they [the Gulf Arab nations] manage that opportunity has far-reaching implications not only for their own populations but also for the entire global economy,” suggest Kito de Boer and John Turner, director and consultant at McKinsey’s Dubai office in the article “Beyond oil: Reappraising the Gulf States.”

Epoch Times