Given that Venezuela is now suffering from severe inflation, you can say that Saudi Arabia is practically the country with the cheapest gasoline price at a "normal price level". The price of gasoline in Saudi Arabia is only KRW 300 (=USD 0.24) per liter. However, this figure is also the result of a price jump after low oil prices caused difficulties for national economy since 2014. Before the increase, it was KRW 130 (=USD 0.11) per liter. At the time, a 1.5-liter bottle of mineral water costed KRW 432 (=USD 0.38) in supermarkets, so oil literally was cheaper than water in this country. It was a time when fueling midsize sedans with gasoline cost about KRW 10,000 (=USD 8.83). Some gas stations even offered water or tissues when you filled up your car, so as a Korean who had lived in the country that didn't produce any oil, I almost felt sorry for getting gifts for filling up your car on the cheap.

 It is true that countries such as Saudi Arabia, UAE and Kuwait has high GDP. This means their people live an affluent life on the oil money. Qatar is a small country with a population of two million, but was able to become the host of the FIFA World Cup with their plans to construct stadiums out of oil money produced within their territory. So, you may say that oil can create tremendous added value.

 The map above shows oil-producing countries in the Middle East. We can find countries like Saudi Arabia, Iran, UAE and Iraq, and the numbers marked in yellow percentage are their share in global production. This demonstrates that Saudi Arabia and Iran have large market shares.

 But, you also need to think about the fact that there are countries not mentioned on this map. The countries with oilfields and ones without them reveal a great disparity in their economies. Middle East countries with small or no oilfield including Jordan, Lebanon, Egypt, Tunisia and Morocco are put to a disadvantageous fight. All of them live in the hot climate with temperature soaring over 40°C in mid-summer, speak Arabic and are Muslims, but whether they have oilfields decides the quality of life of its people.

 If the amount of oil production varies by country in the Middle East, then which country in the world produces the most? It's natural to think that Saudi Arabia produces the most, but surprisingly, that accolade in fact belongs to the US.

 Through to 2013, it was Saudi Arabia>Russia>United States, but the US has topped the list since 2014. And this ranking has remained unchanged. You can easily imagine that Middle East nations would sweep the top rankings in oil production but non-Middle East countries including the US has changed the established order almost overnight. Only four of the Middle East countries, Saudi Arabia, UAE, Iran and Iraq, had their name on the top ten oil producers.

 The Middle East is facing the new challenge of the era of low oil prices. They used to wake up in the morning, opening the oil tap, selling what pours down and earning big cash in return, but now they sell the same amount only to earn half the money. Their economy had its expenditure adjusted to profit in the time of high oil prices, whereas they now run deficits.

 In the background of the fall lies shale oil the US exports, but the main cause can be found in the fundamental economic principle of demand and supply. China used to be the second largest oil importing country following the US, but reduced the quantity of its imports after their manufacturing business declined along with the global economic recession. This took a toll on oil exporters creating an endless cycle of economic shrinkage started from oil producers resulting in another global recession.

 Within the Middle East zone, oil industry run by oil-producing countries is the center of the economy which leads to doubts over whether they would be able to overcome the economic crisis across the region caused by low oil prices. In the end, it seems natural to worry that the desert land would be down without oil.

 But as the saying goes "a rich man can survive three years, even though he gets broke," I do think that the Middle East won't go down easily with the power they have accumulated. And the reasons are:

 First, they have the Islamic capital built. In the midst of opulence during the high oil prices era, they didn't just spend all the money they made. The cumulative current account surplus has been substantiated in the name of Islamic capital and invested throughout the globe. Purchasing bonds or real estate were their main investments. New profit from the oil may reduce due to the low oil prices, but their accumulated money has a high chance of becoming a powerful casting vote in the global economy of the future. In the event the Islamic fund sells off its assets en masse, the resulting depreciation might drag down the global economy.

 Second, they care to invest on new renewable energy to prepare for energy exhaustion. When we run out of buried fossil fuels, European countries who had long been investing on developing eco-friendly and new renewable energies will likely seize the hegemony, whereas countries such as Saudi Arabia and UAE have been investing a significant deal in eco-friendly energy as well. Their efforts had not seen the light at this time when using reduced oil costs, but they have an elaborate plan not to get into self-destruction, even though the economy driven by natural resources ends.

 Third, their market itself has buying power. The population of Muslims and that of Middle East and Africa are growing faster than any other global religion or region. They move against the low-birth rate trend and many of them still worship fertility. The increased buying power brought by population growth signifies potential growth. Since there still remains development opportunities in the public and retail sector, if they adapt themselves to low oil prices and successfully transform the nature of their economy, then they will be able to cultivate unexplored fields and find their way through boundless growth.

 Some day the Earth's fossil fuel will be exhausted, but till then its engines will have to run on oil. And the one who owns that oil will have the power. Then it will be necessary to keep an eye on the flow of that immense power and lead our business. This chapter started off with lightness and ended heavy, but I promise to come back with pleasant stories next time.