The Middle East region is of high relevance to the global energy system. While the role of the state is declining in almost every sector of world economic activity, in the petroleum industry the pattern looks quite different. From an economic standpoint, privatization of the petroleum sector would be the rational strategy because it offers greater long-term prospects for economic growth and sustainable development. Yet it is also politically rational for state leaders in authoritarian regimes to retain state control over the oil production sector as this provides them with easier access to oil revenues and maximizes their ability to stay in power. Over the last two decades the strategies pursued by the Middle East petroleum-rich autocracies in their oil production sector have been widely different. The aim of this paper is to identify the factors that can explain the openness/ closeness of the Middle East countries towards foreign participation in their oil production sector by analyzing the legal structures made available by host governments and thus, their willingness to share control over crude oil production and profit. Drawing on the expropriation/ privatization literature and the Middle East Area Studies, the paper proposes a theoretical model which seeks to explain the variation in oil production strategies in the institutional context of the Middle East rentier state. To this end, it will then conduct a multivariate regression analysis on the population of Middle Eastern petroleum-rich states over the last 20 years.
