THE USA, with a population of 300 million, consumes as much oil as China, Japan, Russia, Germany and India put together, their populations combined exceeding almost 10 times that of the USA. Words like amoral, greedy, indifferent, and downright criminal come to mind in these times of climate change and disingenuous promises to reduce carbon emissions while maintaining outrageously high levels of consumption.
Economies addicted to oil, like junkies to heroin, employ any manner of means to protect their supply which, apart from home production, comes to the US (in order of importance) from Canada, Mexico, Saudi Arabia, Venezuela and Nigeria. Imports to the US originating from Columbia, Algeria and Iraq equate in total with those from Saudi Arabia.
It is fair to say that this present unrest in the Middle East and North Africa has thus far not impinged on US interests in the region. Bahrain is more a US military base than an oil producer; their reserves tiny by comparison to the big players. With its highly developed communication and transport facilities, Bahrain is home to numerous multinationals. High unemployment, especially among the young, and the depletion of both oil and underground water resources, are major long-term economic problems, but Bahrain will not be permitted to go the way of Libya!
Hydrocarbons play a sizeable role in Egypt’s economy, both from oil/natural gas production and in terms of revenues from the Suez Canal. Egypt’s consumption is slightly higher than production and she has begun to rely on a small volume of imports to meet domestic demand. This is offset by the rapid development of the natural gas sector for both domestic consumption and export. Over the past decade, Egypt has become a significant natural gas producer and a strategic source for European natural gas imports. Egypt did not go, and will not be permitted to go, the way of Libya!
Algeria, an important OPEC member, is the fourth largest crude oil producer in Africa after Nigeria, Angola and Libya. Algeria is the sixth largest natural gas producer in the world after Russia, the United States, Canada, Iran, and Norway, 70 per cent of which is exported and 30 per cent consumed domestically. Although there have been rumblings of unrest recently, Algeria does not look like going the way of Libya.
Unlike Algeria, Tunisia’s upstream oil industry is modest. Sound fiscal policies have resulted in Tunisia being listed as a country with the soundest growth prospects. Tunisia did not go the way of Libya, in fact their president fled with the offertory tray to the safe haven of Saudi Arabia.
Yemen had proven oil reserves of three billion barrels as of January 1, 2010. Despite interest from a large number of companies during an initial licensing round in late 2007, exploration of Yemen’s offshore areas has been harmed by the escalation of Somali piracy in the Gulf of Aden. Yemen is reportedly in talks with China’s Sinopec, among other companies, to upgrade the Aden refinery. Yemen might go the way of Libya, but who cares?
Iran is a big player and has an estimated 10 per cent of the world’s total reserves. In 2008, Iran exported oil primarily to Asia and the OECD European countries, making it the fourth largest exporter in the world. Iran dare not go the way of Libya.
Saudi Arabia contains oil reserves amounting to around one-fifth of proven, conventional world oil reserves and could make up any shortfall in world demand if requested to do so, given Iran keeps its internal unrest under control. Saudi Arabia cannot go the way of Libya, the US wouldn’t permit it.
On the other hand, 80 per cent of Libya’s oil and gas is exported to Europe. A member of OPEC, Libya holds the largest proven oil reserves in Africa, followed by Nigeria and Algeria. Little of its production finds its way to the USA, making Libya expendable. Should Libya go, and it looks very much like she will, then Saudi Arabia will temporarily make up any European shortfall until a new regime in Libya goes the way of Saudi Arabia!
The United States holds 80 days of oil reserves. The unrest is now in its fourth week and has thus far had no effect on these reserves or the supply of oil. Until it does, the US will sit on the sidelines, ready to pick up the pieces – cheap oil. Thereafter, they are certain to benefit from increased trade and growth in all of the realigned and so called newly democratised Arab states.
The price of crude has risen on the commodity markets by more than 80 per cent in this past two years. Who, if anyone, is making a killing with this unrest if not the USA? Mind you, what with their trillion plus dollar Trade Deficit, what do we expect? Some might argue that they should burn in hell yet, given the vast quantities of fossil fuels they are burning by comparison to other world powers, we all will!
