Oil Industry in United Arab Emirates (UAE) and its Future (Essay Sample)

Oil industry in United Arab Emirates
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The United Arab Emirates (UAE) is a country popularly known for its oil reserves. It has seventh largest oil reserves in the world. Dubai is its re-known capital city that features frequently in business and its outstanding construction with iconic skyscrapers and islands that are palm-shaped. This paper intends to discuss the oil industry in United Arab Emirates and predict its future.
UAE faces a future threat with regard to the transport sector. Biofuels are replacing oil as liquid fuels and the current vehicles manufactured are more fuel efficient. The major drive for this is due to rise of oil prices since 2005 and the government policy to reduce carbon emissions. Therefore, this threatens the economy of oil manufacturing countries like UAE since only efficient automobile market is secured instead of oil. Businesses outside oil fuels are looking forward to impose policies against carbon emissions. Main private sector oil companies have refinery legacy and major distributions are to "non-growth" markets (Mitchell, Marcel & Mitchell, 2012).
The role of Oil Producing and Exporting Countries (OPEC) will change. Even though international oil will continue to be controlled by strong economies, the role of OPEC will change. OPEC’s regulation will not only balance the weaknesses of the future short demand of members production during the time when prices are low but rather reaction of the producers of the non-conventional oil. This is because the non-conventional flexible costs that will drive them to lower drilling and thus delay any new project. Competition in the medium term will be experienced between the investments that are made now and in the new oil sources and oil substitutes of oil fuels. Furthermore, competition in the medium term will be experienced from the investments made now to reduce the usage of oil by huge efficiency. Competition from the outside the oil industry is real and is great threat in the future to countries manufacturing oil like UAE.
There is the problem of shifting of oil security issue to Asia. There is a fundamental change of geopolitics of oil since interregional oil splits between the East and the West. Asian countries absorb more oil beyond the amount the Middle East is able to supply. Consequently, this alters the security of the supply problem. For countries of the west, the major risk is price and not supply because interruptions to the suppliers of Asia will impact on world oil prices. Political as well as physical security actions have not concurred with these facts. Even though they are constructing their own oil stores, major Asian coun...