At a superﬁcial level, the oil revenue windfall may seem to signal good news for the region. Surprisingly few countries are not oil or gas producers. In fact only Morocco and Lebanon produce no hydrocarbons and most states are highly dependent on such exports. Even countries not normally thought of as oil exporters ﬁnd themselves dependent on it for government revenue and foreign exchange.
For example, Yemen is more than ninety percent dependent on oil for merchandise exports. For Syria the ﬁgure is over seventy percent and even Egypt’s export dependence is more than forty percent. Higher oil and gas prices – which are linked to oil, plus rising production, imply greater government revenues and access to foreign exchange.
And prices have been ﬁrming. The Organization of Petroleum Exporting Countries (OPEC) basket of crude oils averaged $24.79 per barrel in 2002; $28.22 last year and; so far this year $35. By mid October the basket price was close to $50.