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This chapter looks at the role of oil in the political economy and the international relations of the Middle East. Oil is commonly considered a political commodity. Because of its pivotal importance as a primary source of energy, governments are concerned with its continued availability and seek to minimize import dependence. Historically, interest in oil — especially in the United Kingdom and the United States — strongly influenced attitudes towards the Middle East and the formation of the state system in the region, following the collapse of the Ottoman Empire. Oil also affects the power balance within the region. The polarization in the region between oil-rich and oil-poor states is thus an essential tool of analysis. The parallel distinction between rentier and non-rentier states helps to explain how oil affects the domestic political development of the oil-rich states and influences their regional relations.