why does oil bring wealth to Arabia and Iraq?
abundance of wells
low cost of production
high global demand>>>>
scarcity of water
You're right.
Oil brings wealth to Arabia and Iraq due to several factors:
1. Abundance of wells: Both Arabia and Iraq have significant reserves of oil in their territories. These countries are rich in oil wells that can be tapped to extract crude oil. The presence of a large number of wells allows for a consistent and substantial supply of oil, which contributes to their wealth.
2. Low cost of production: The cost of extracting oil in Arabia and Iraq is relatively low compared to other regions. This is due to various factors such as the ease of access to oil reserves, favorable geology for drilling, and relatively inexpensive labor. The lower cost of production helps maximize profits for oil-producing companies and governments in these countries, thereby contributing to their wealth.
3. High global demand: Oil is a crucial energy resource that is in high demand worldwide. It is used for various purposes such as transportation, electricity generation, and industrial processes. Arabia and Iraq, being major oil producers, benefit from the global demand for oil. This demand creates a constant market for their oil exports, leading to substantial revenues and wealth accumulation.
4. Scarcity of water: While not directly related to oil wealth, the scarcity of water in Arabia and parts of Iraq has made oil a valuable resource. These regions are arid and face water scarcity, making it difficult to support extensive agriculture or other water-dependent industries. As a result, oil has become their main source of wealth and economic development.
To summarize, the abundance of wells, low cost of production, high global demand for oil, and the scarcity of water contribute to the wealth that oil brings to Arabia and Iraq.