Natural Resources: Can the Oil and Gas Industry Continue to Support Further Economic Development?

Abstract

Oil and gas have been the main contributor to the economic development in the Middle East, North Africa and various other regions. In the face of increased concerns regarding the use of oil and gas, there is a need to understand whether relying on these natural resources, for further economic development, is sustainable, or not. By reviewing the existing literature and providing a descriptive analysis of the oil and gas market, the aim of this paper is to explain the existing problems for the future of the oil and gas industry. After the introduction and the methodology, there is a literature review section, the analysis of oil and gas market in the world, and then the examination of the recent sanctions on oil and gas and their economic impacts. Finally, the authors discuss the main problems related to oil and gas. A major finding found, as a result of our study, is that due to the volatile market prices, high sensitivity to external factors, transition to renewable energy resources, possible damages to demand and the underdevelopment of non-energy sectors and human capital, the non-renewable, resource-based, natural sustainable development, is not possible to achieve in the near future. Our conclusion is that while non-renewable energy resources have been the driver of economic growth in many countries, the problems related to their usage and many external factors that can lead to a decrease in demand for oil and gas, means that it will not be possible to achieve sustainable development through the oil and gas industry, in the future.