Salvatore Capasso, Giovanni Canitano (a cura di)
Mediterranean Economies 2023
DOI: 10.1401/9788815411167/c4
The fall in energy consumption is shown in figure 3 which displays side by side the reduction in GDP in the years hit by the pandemic, namely 2020 and 2022. The year 2020 is associated to the outbreak of the pandemic, a shock whose magnitude has never been recorded before. In this year, a fall of –2.6 per cent in global GDP which corresponds to a sharp contraction in energy consumption, about –2.7 per cent which is dictated by the reduction in the demand side rather than supply. The year 2022 saw a recovery in the total final consumption of energy
{p. 118}which recorded a growth of 0.5 per cent despite the degrowth of global GDP (–1.6 per cent).
Fig. 3. Impact of COVID-19 on global GDP and total final consumption of energy (data in percentage change).
Source: elaboration by the authors on data from British Petroleum Energy Outlook 2022.
Whereas the COVID-19 pandemic resulted in demand-side shocks for the energy business, the Russian-Ukrainian conflict has hit the supply of energy sources hard, leading to soaring inflation.
European countries have started to reduce the procurement of fossil fuels from Russia, making deals with non-EU countries to cover the shortfall of primary energy resources. Figure 4 shows the trend over time of the reliance of France, Italy and Spain on Russian oil. The level of oil imports followed an oscillating path until February 2022, when the Russian Federation invaded Ukraine.
Since this event, the three European countries had to slow down the commercial trade in energy sources with Russia, especially Spain whose oil imports from Russia plummeted to zero by mid May 2022. Italian import levels followed instead the opposite trend: in March 2022 oil imports started to increase until May 2022 when they followed a slow degrowth, subsequently resuming growth in August 2022. {p. 119}
Fig. 4. Oil imports from Russia on total oil imports (data in percentage).
Source: elaboration by the authors on data from IEA [2022], Monthly Reliance on Russian Oil.

3. The MENA region: fossil fuel production and reserves

The MENA region includes countries with the highest concentration of oil and natural gas resources worldwide. In 2020, it represented the area with the highest percentage of oil reserves, namely 50 per cent of the world reserve. Analysing the specific amount of reserves held by the Middle East and North Africa, the former possesses 46.3 per cent of total oil reserves, while the remaining 3.4 per cent is held by North Africa, respectively 113.2 million tonnes and 8.3 million tonnes.
Expressed in a thousand million barrels, the amount of oil reserves held by the Middle East was 834.3 in 2017 while in 2020 it recorded an increase of 0.19 per cent, reaching 835.9 thousand million barrels.
Natural gas is the second largest fossil fuel owned by MENA countries whose reserves amount to 43.4 per cent. Splitting this percentage respectively for the Middle East and North Africa, the Middle East is the region which holds the highest share (40.3 per cent) of the world’s reserves. The data show that in 2020 {p. 120}its natural gas reserves amounted to 75.8 trillion cubic metres, against 75.3 trillion cubic metres in 2017. This means that the endowment of natural gas in the Middle East has maintained its stability over time. A different scenario applies to coal, most of whose reserves are held by the rest of the world. The MENA region owns only 0.11 per cent, a percentage that has decreased by 0.1 per cent since 2017.
From a production perspective, 1,465.3 million tonnes of oil were produced in MENA in 2021, corresponding to the 34.7 per cent of total world production whose only the 31.2 per cent is produced in the Middle East. The top two oil producers in the Middle East are Saudi Arabia and Iraq, which account for 515 and 200.8 million tonnes, respectively. In North Africa, the main producers are Libya and Algeria, which account for 59.6 and 58.2 million tonnes, respectively. With respect to 2017, in the MENA area, there was a 13 per cent decline in oil production in 2020. This signals not only the transition towards renewable energy but also the effects of the COVID-19 pandemic. The economic {p. 121}recovery in 2021 is signalled by the higher production than that in 2020 (1,465.3 million tonnes vs 1,405.2 million tonnes), but which is still lower than that recorded in 2017.
Fig. 5. Reserves of oil, natural gas and coal in the MENA region and the rest of the world in 2020 (data in thousand million tonnes (oil), trillion cubic metres (natural gas) and million tonnes (coal).
Source: elaboration by the authors on data from British Petroleum [2022], Statistical Review of World Energy 2022.
Fig. 6. Production of oil, natural gas and coal in the MENA region and rest of the world in 2021 (data in million tonnes (oil), trillion cubic metres (natural gas) and million tonnes (coal).
Source: elaboration by the authors on data from British Petroleum [2022], Statistical Review of World Energy 2022.
The MENA countries are also producers of natural gas but to a lesser extent: in 2021, they accounted for only 22.2 per cent of world production. Most of this production was from the Middle East countries (17.7 per cent of total production which corresponds to 714.9 billion cubic metres). Unlike oil production, natural gas production has increased over time. It increased by 12.7 per cent against 2017, and by 6.6 per cent against 2020.
Fossil fuels currently remain the energy source most widely used and traded, also in a future scenario in which renewable energy is used. The southern Mediterranean region and the Arabian peninsula to Iran and Iraq constitute the greatest reserves of fossil fuels. They represent the key countries in terms of trade towards European countries also thanks to their strategic geographical position and possession of natural deposits.{p. 122}

3.1. Analysis of MENA countries by oil and natural gas endowment

In this section we will analyse the endowment of the two fossil fuels, oil and natural gas, in MENA countries. Inside the MENA region, six Middle Eastern countries possess almost all the energy resources: Iran, Saudi Arabia, Qatar, Iraq, UAE and Kuwait. North African countries are those with the lowest levels of reserves. As regards oil reserves, Saudi Arabia has reserves that exceed those (33.66 per cent) of the other MENA countries. It is followed by Iran and Iraq which possess 17.86 per cent and 16.13 per cent, respectively, of MENA reserves. Furthermore, the residual life of the reserves in these three countries exceeds 50 years. Reserves of countries like Iran and Kuwait can reach peaks of 139 and 103 years of residual life. Analysing the supply, Saudi Arabia comes first for production and refinery capacity. Its production of oil amounted to 519.6 million tonnes in 2020, with a refinery capacity of 2,905 thousand barrels per day. The second producer is Iraq which accounted for 202 million tonnes of oil. It is followed by the UAE and Iran.
{p. 123}