Sang Yoon Shin and Ceyhun Mahmudlu
Dr. Shin is a professor in the department of entrepreneurship and small business, college of business administration at Soongsil University. Dr. Mahmudlu is a professor at the department of government at Cornell University.
The global oil market is witnessing three major game-changers. They include the demand reduction in the medium and long term, the shale revolution, and the geopolitical risks in the Middle East. While all these market changes are critical to the
global market, the effect of the shale revolution seems strongest.
To respond to this market changer exerting pressure on oil prices to decrease, some oil producers in the Middle East, which are members of the Organization of Petroleum Exporting countries (OPEC) at the same time, have made agreements with
major non-OPEC oil producers, except the U.S., to reduce output, and have abided by such agreements. This collective action seems effective in maintaining oil prices to some degree. However, individual strategies of oil producers in the Middle East show
differences. In particular, Saudi Arabia and Iran, which have been dominant rival countries in the Middle East for a long time, have demonstrated distinct paths in pursuing their national strategy.
This study focuses on two dimensions in a national strategy of Iran and Saudi Arabia. First, what industries they will nurture? Second, what countries they will cooperate with?
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