Iran, Iraq, and the six Arab states on the Gulf (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) enjoy several advantages as the world's major oil and natural gas producers. First, together these eight states hold the world's largest proven oil and gas reserves. Their combined shares of the world's proven oil and gas reserves and production are larger than any other region. No region in the world holds as much proven reserves. The high level of production and low (though growing) level of consumption mean that a substantial proportion of the oil produced in this region is exported to the rest of the world. Meanwhile, the massive natural gas reserves and the relatively small volume of production mean that the region has the potential to play a leading role as a natural gas supplier, once gas deposits are fully developed.

Second, the cost of production in the Gulf is one of the lowest in the world. Unlike Russia, the Caspian Basin, the North Sea, and the Gulf of Mexico, most oil and gas fields are either onshore or in the shallow waters of the Gulf. This accessibility means that much of the oil and gas production in the Gulf region is less environmentally challenging and cheaper to produce.

Third, the Gulf region has been producing and exporting oil and gas for decades. Generally the energy infrastructure is well developed. Extensive pipeline networks connect the oil and gas fields to marine export terminals and loading platforms on the Gulf. From there the region has easy access to the high seas and global markets. Unlike other producing regions, shipping ports on the Gulf do not experience major storms or freezing.

Finally, traditionally most of the world's spare capacity of oil is concentrated in the Gulf, particularly Saudi Arabia. This spare capacity serves as an insurance policy against any unexpected interruption of supplies due to natural or political reasons. This concentration of spare capacity can be explained by the fact that oil and gas production is dominated by stateowned national companies. Unlike private international oil companies, which aim mainly to maximizing their profits, these state-owned and state-managed national oil companies are driven by both strategic concerns and commercial interests. Saudi Arabia and other Gulf producers maintain spare capacity to ensure short – and long – term stability of global markets.