Oil is the remains of microscopic algae that have been pressed and heated deep within the earth, and then entombed by layers of more finely-grained rock overlying it. Much of the Middle East consists of ancient sea-bed that was scraped up as Africa plowed northward across the Tethys Ocean and ultimately into Europe, which could explain large amounts of oil in the Middle East. However, if this were true, then similar places in the world, such as North Africa, India, Indonesia, and California should also have large amounts of oil. Of these, Indonesia does, but north Africa, India, and California do not, so obviously there is more to this, and this also doesn't explain why places like Texas or Venezuela also have oil. I don't think we really understand what causes some parts of the world to have more oil than others.
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