U.S. Investments in Middle East Petroleum

by H. Jackson



The article focuses on the U.S. investments in Middle East Petroleum. One of the main sources of energy for today's technological world is petroleum, and the major reserves of this commodity are in the Middle Eastern countries. Consequently, the U.S. petroleum companies have made substantial investments in the Middle East. For a number of years serious questions have been asked about the outflow of capital funds for direct investment abroad and its weakening effect upon the U.S. balance-of-payments position. The issues are concerned with whether or not there is a net loss of funds available for investment in the U.S. and whether the direct investments abroad supplement or supplant investments in the U.S. It is not easy to resolve these issues, as they have become emotionally charged in recent months because of the structural disequilibrium in the U.S. economy, its manifestation in the U.S. balance of payments, and the oil embargo. It is the purpose of this article to analyze the U.S. direct investment in Middle East petroleum and the investment's contribution to the U.S. balance of payments for the years 1962 to 1972.

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