Rakesh and list: This posting bears directly on recent oil discussion. I believe it is undoubtedly correct, i.e., after the Afghanistan is re-constructed there will be a realignment of Western and Japanese dependence on oil from middle eastern states. Russia will become increasing important. >X-Comment: CMUVM.CSV.CMICH.EDU: Mail was sent by imo-d03.mx.aol.com >X-Mailer: AOL 6.0 for Windows US sub 10539 >Date: Mon, 15 Oct 2001 00:32:09 EDT >Reply-To: Association of Black Sociologists <ABSLST-L@LISTSERV.CMICH.EDU> >Sender: Association of Black Sociologists <ABSLST-L@LISTSERV.CMICH.EDU> >From: Stallwor@AOL.COM >Subject: Worth following (Part 2) >To: ABSLST-L@LISTSERV.CMICH.EDU > >ABS: > > Realpolitiks. > >Regards, >WLS >---------------------------------------------------------------------------------------------------------------------- > > ><http://www.latimes.com/business/la-000081843oct14.story>http://www.latimes.com/business/la-000081843oct14.story > > >After War, A World Economy Less Reliant on Middle East > >James Flanigan >October 14 2001 > >Although nobody is talking about U.S. oil interests in the war on >terrorism, beneath the surface serious questions are bubbling about >long-term supplies of petroleum and the shape of governments in the >oil-rich Middle East. Once the war is over--"once Afghanistan is >stabilized," in one oilman's words--a new order may emerge. > >The oil-bearing countries' relationship with the United States and other >regions will change. There will be a power shift among oil producers. >Major oil companies will be in a more advantageous position. > >To be sure, the war today is in Afghanistan, which is not an oil producer >yet. And there is no shortage of oil, as the Organization of Petroleum >Exporting Countries has kept production at a high level and prices stable >since Sept. 11, despite a worldwide business slowdown. But the issues of >international terrorism, led by Saudi-born terrorist Osama bin Laden, and >the vehement anti-Americanism of oil-producing Middle East countries are >causes of concern. The United States imports more than half the oil it >uses, and 28% of its imports come from the Persian Gulf region. > >In the new environment after the war on terrorism, within the next two >years or so, the global economy won't be held hostage to the Middle >East--although it still will depend heavily on oil from OPEC nations. > >It is too early to tell precisely what the new environment will be. But >changes are coming in Saudi Arabia, Iraq, Iran and other countries. > >Some trends already are clear. Russia, the third-largest oil producer >after Saudi Arabia and the United States, has ambitions to increase its >role internationally. > >"Japan and China and Korea would like us to supply energy to them," says >Victor Ishaev, head of administration for the vast Khabarovsk region of >far eastern Russia. > >After the Sept. 11 attacks, Russian Prime Minister Vladimir Putin pledged >Russian energy supplies to a worried Europe, undermining any leverage OPEC >might have had. > >The former Soviet states of Central Asia will see development of oil and >natural gas and pipelines built to carry those fuels to China and India. A >new oil field called Kashagan, in the Caspian Sea area of Kazakhstan, is >extremely large. > >"Two wells have been drilled 25 miles apart and yet geology shows they are >connected," reports Albert Anton, head of research at Carl H. Pforzheimer >& Co., a New York investment bank specializing in energy issues. > >"The field could hold 30 billion barrels of oil," he adds--or as much as >the United States' oil reserves. > >Major oil companies will see great demand for their skills to develop oil >and gas in all parts of the world. BP is working on three natural gas >projects in the Irkutsk area of Siberia. > >Saudi Arabia has reached out to eight international companies to develop >natural gas deposits. ExxonMobil, Royal Dutch Shell, BP and Phillips >Petroleum are negotiating terms of Saudi gas projects worth $25 billion. >Occidental Petroleum, Marathon Oil, Conoco and French company TotalFinaElf >also will be involved. > >The gas projects are significant because the Saudi government launched >them as job development projects for the country's many underemployed >young people. > >Regarded 30 years ago as a place of endless riches, Saudi Arabia has seen >a population boom but not an economic one in the intervening decades. > >It now needs to develop a diversified economy, but is torn by conflicts >within its royal family over policies toward the United States and is >threatened by fundamentalist groups influenced by Bin Laden. > >"The No. 1 concern is instability in Saudi Arabia," says Patrick Clawson, >research director of the Washington Institute for Near East Policy and an >expert on terrorism. > >"Disruption in Saudi Arabia could prevent it from increasing supplies of >energy to the world economy," Clawson adds. > >But trouble in the Arab kingdom would not shut down the world economy as >it might have in the 1970s. > >There are vast supplies of oil in other countries, albeit some of them >more troubled than Saudi Arabia. > >Iraq, which recently discovered an oil field in its western desert, is >widely regarded as having more oil than Saudi Arabia once its deposits are >developed. Iraq is producing 3 million barrels a day, funneling most of it >to world markets through a United Nations-monitored program that directs >the proceeds to food and medicine for the Iraqi people. > >But Saddam Hussein's country has been stepping out. It ships oil to Syria, >which has grown newly prosperous reselling Iraqi oil. A chief customer is >the United States, which likes the low sulfur content of Iraqi oil, says >Nimrod Raphaeli, publisher of the Middle East Economic News, a >Washington-based newsletter. > >However, Iraq these days is worried about being attacked by U.S. and >British forces once they are done in Afghanistan. And indeed it may be >attacked, although regional experts say peaceful interventions by other >countries also could stop Hussein's government from sponsoring terrorism. > >Iran is working out internal conflicts over economic development. But with >a population of 62.5 million mostly young, educated and ambitious people, >Iran will need to join the general development going on around it. > >The aftermath of war, experts predict, will see pipelines laid through >Afghanistan to bring Central Asian oil and gas to Pakistan and India. > >Afghanistan itself has resources of natural gas and oil to be developed, >according to "Nutshell Notes on Afghanistan," a new book on the country >published by Enisen Publishing in Santa Monica. > >In the meantime, Russia will continue to develop its relationship with the >West, which has shifted dramatically in recent weeks. > >In quickly calling President Bush on Sept. 11 to pledge Russian support >for the U.S., "Putin made smart moves that change Russia's economic >outlook," says Joseph Stanislaw, director of Cambridge Energy Research >Associates. > >In Asia, Japan, China and other growing customers for oil and gas, are >diversifying their suppliers to reduce dependence on the Middle East, >notes analyst David Knapp, of Energy Intelligence Group, which publishes >newsletters for the oil industry. > >The United States, too, could reduce the threats of energy disruption, >says energy economist Philip Verleger, of Newport Beach. > >Introduction of more efficient vehicles, using technology already >available, "could reduce motor fuel use by 3 million to 4 million barrels >daily, savings that would substantially reduce the world's demand for >Middle Eastern oil," Verleger says. > >Whether such a saving, 16% of U.S. oil use today, will be achieved, >Verleger predicts "a drastically increased focus on energy conservation." > >Meanwhile the Middle East could benefit from less pressure to provide so >much of the world's energy needs. The region has occupied a curious >position since a dramatic rise in the price of oil changed world economies >in the 1970s. Production of its resources has not given the region >prosperous economies, even though countries in Asia and elsewhere have >prospered. > >In a postwar environment of peace--however achieved--the region and the >world may enter a more productive time. > >(BEGIN TEXT OF INFOBOX / INFOGRAPHIC) > >Oil Reserves and U.S. Imports > >In the long term, the holders of the biggest petroleum reserves will >remain critical to the global economy. > >*--* > >Country Oil reserves* (Billion Barrels) Saudi Arabia 262 Iraq 112.5 United >Arab 97.8 Emirates Kuwait 96.5 Iran 89.7 Venezuela 77.0 Russia 48.6 United >States 29.7 Libya 29.5 Mexico 28.3 > >*--* > >* Reserves are as of Dec. 31, 2000 Source: BP Statistical Yearbook. > >The United States depends on these producers for oil imports, which now >comprise more than 50% of U.S. consumption. > >U.S. Imports by Country (billions of barrels per day) > >*--* > >Supplier Country U.S. imports Saudi Arabia 1.7 Venezuela 1.3 Canada 1.3 >Mexico 1.3 Nigeria 0.9 Iraq 0.6 Angola 0.3 Norway 0.3 Kuwait 0.3 Colombia 0.2 > >*--* > >* U.S. imports are January-July 2001) > >Source: U.S. Energy Information Administration > >* > >James Flanigan can be reached at jim.flanigan@latimes.com
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