Description of the Topic
The Middle East energy sector has been extremely instrumental to the economy of the region. It is dominated by the petroleum or oil industry. According to OPEC (2018), the region accounted for 64.5% of the total oil reserves across the globe. Oil is so ingrained into the fabric of the Middle East that lack of it could potentially cause a collapse of the economy. On that note, most nations in the region have been pumping billions of dollars to ensure the sustainability of the oil industry (Sarant, 2016). Yet, amidst the complete dependence on oil for economic growth, Lee (2019) notes that the reserves are continuously dwindling, which spells doom for the future of the region’s economy. In Iran, overdependence on oil economy is already proving problematic with the recent drop in the GDP to 3.8% between 2017 and 2018 (The World Bank, 2018). Ranking fourth in the world in terms of crude oil reserves, oil has single-handedly grown Iran’s economy over the years. The current study will assess the positive impacts of oil in the economy of Iran as a representative of the Middle East over the years.
Objectives of the Study
The primary aim of this study is to highlight, examine, and discuss the positive impacts of oil on the economy of Iran, and the Middle East at large. Other objectives will include:
· To understand the relationship between the energy sector (oil production) and Iran’s economy
· To determine whether the energy sector (oil and petroleum reserves) has been a blessing or a curse to the country.
· To understand the challenges of pegging an economy on oil and petroleum reserves.
Research Question
The main question driving this study will be: In what ways has the energy sector (oil industry) supported and facilitated the growth of Iran’s economy?
The Rationale of the Study
Apart from the continuous dwindling of oil reserves in the Middle East and, particularly, Iran, the recent tension and sanctions by the U.S.A. have impeded its ability to export oil (Rapier, 2020). The following study delves into the impact of these hurdles on the economy of Iran as a means to find out how vital oil is to the country's economy. On that note, it will inform ways and means of dealing with such problems in a manner that does not affect the economy.
Research Design and Methodology
The following study will apply a mixed qualitative and quantitative approach. The primary benefit of using a mixed methodology is a strong conclusion and high validity of the results (Schoonenboom & Johnson, 2017). Qualitative research methods collect descriptive data, while quantitative methods gather statistical information (Johnson & Christensen, 2019). In this study, qualitative data collection methods, such as the use of structured questionnaires and interviews, will be used to collect descriptive data (Johnson, 2017). Such data will be analyzed through graphs and charts, while statistical results will be examined through regression and other relevant quantitative methods. The random sampling method will be used to recruit top economists from the region, researchers, and players in the oil and petroleum industry. Taherdoost (2016) states that random sampling eliminates bias, thus increasing the reliability, credibility, and validity of the results.
Sources of Data
Since it applies a mixed methodology, the study will incorporate both secondary and primary data. Secondary data will be obtained through internet searches for relevant information and from books, newspapers, periodicals, and existing studies on the subject. Internet searches will involve keywords such as ‘oil and the Iranian economy,’ and will concentrate on sources whose publication date was done within the last ten years. On the other hand, primary data will involve responses that have been provided by the population of this study. Interviews and questionnaires will be used to capture the responses for further analysis and comparison with the information from secondary sources.