Oil Price Fluctuations and Their Impact on the Economies of the Gulf States for the Period (2005-2015), Saudi Arabia is a model

Abstract

       The fluctuations in oil prices have become a threat to the economies of the Gulf countries as it represents the lifeline of these economic and they depends on oil revenues significantly.

     The study examined the problem of fluctuations in oil prices and their impact on the economies of the Arab Gulf countries for the period (2005-2015). Because oil is an inflexible commodity and enjoys universal acceptance, and the Gulf States have a huge reserve of it, which is able them  to have a strong impact on the global oil market, as well as being dependent on the proceeds in the financing of  their investments, since  oil prices fluctuate, the economies of these countries are directly affected by its prices.

        The study attempts to explain the impact of these prices as an independent variable on  the economies of these countries , by relying on the most important economic variables which reflect the economic situation in any country and were considered dependent variables which are(GDP, national income, state budget represented by expenditure and revenues).

     The study reached several important results, the most important :The economies of these countries were clearly affected by oil prices,there is also a positive relationship between oil prices and GDP, national income and the budgets of these countries. The increase in oil prices leads to an increase in all the mentioned variables. Kuwait is the most dependent country on the oil sector and the UAE is the least dependent.

      The study recommended several proposals, the most important of which is the work on the development of alternative energy, the adoption of a unified foreign policy towards the fluctuations of oil prices in terms of oil production, and reduce their dependence on oil revenues through the development of alternative sources and diversification of sources of income.