Y376 IPE: Oil Politics. October 13, 2009

Transcription

1 Y376 IPE: Oil Politics October 13, 2009

2 Oil-- Synonymous with Advanced Industrialization and Globalization Essential to industry as: Transport fuel Industrial fuel Raw material input Modern militaries most important material: Portable, non-volatile, efficient, easily handled Churchill s decision The essence of modern geopolitics: Basis of much of modern society (suburbs, mass transit, heating, electricity, industrial base) Access is economic life or death

3 World Energy Consumption, , in Terawatts (TW)

4 World Crude Oil Production and Consumption, 2003 Barrels per day (2003) 11 million Production Consumption Source: Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University

5 Top Consuming Countries, , in Million Barrels per Day

6 Figure 9-5. World Consumption of Petroleum, , in Millions of Barrels per Day Source: U.S. Department of Energy, Energy Information Agency, International Energy Annual (various years).

7 OPEC Organization of Oil Exporting Countries

8 Table 9-1. Members of OPEC Country Membership Algeria 1969 Angola 2007 Ecuador Rejoined 2008 Indonesia 1962 Iran 1960 Iraq 1960 Kuwait 1960 Libya 1962 Nigeria 1971 Qatar 1961 Saudi Arabia 1960 United Arab Emirates 1967 Venezuela 1960

9 Major Crude Oil Reserves, 2006 Source: Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University

10 OPEC Headquarters, Vienna Sheik Ahmed Zaki Yamani

11 Figure 9-4. Production of Crude Petroleum by OPEC Countries, , in Millions of Barrels per Day Source: U.S. Department of Energy, Energy Information Agency, International Energy Annual (various years).

12 Figure 9-7. OPEC and Non-OPEC Oil Production, , in Millions of Barrels per Day Source: Department of Energy, Energy Information Agency, International Energy Annual (various years).

13 Non-OPEC Oil Production,

14 Major Oil Routes & Chokepoints, 2000 Middle East North America Latin America Africa Western Europe Former Soviet Union Pacific Asia Panama Bosphorus Hormuz Suez Bab el-mandab Malacca Million barrels per day Source: Jean-Paul Rodrigue, Dept. of Economics & Geography, Hofstra University

15 Price of Oil, Nominal and Real , $ per Barrel Source: Wikipedia.

16 Figure U.S. Gasoline Prices in Current and Constant 2007 Prices, , in Cents per Gallon Source: Department of Energy, Energy Information Agency, Short Term Energy Outlook, August 2008.

17 Figure 9-8. U.S. Production, Consumption, and Imports of Crude Petroleum, , in Millions of Barrels per Day Source: Department of Energy, Energy Information Agency, International Energy Annual (various years).

18 $ per barrel (2005 US$) Annual Demand Increase in Mill brls/day Real Price of Oil and Major Disruptions in World Oil Supply Gulf War Suez War 6 Days War Iranian Revolution OPEC Embargo Iran / Iraq War

19 Challenges to the Seven Sisters and the rise of the cartel (OPEC) Oligopsony = An oligopsony is a market form in which the number of buyers are small while the number of sellers in theory could be large. The Seven Sisters were also an oligopsony! A cartel is a group of formally independent producers whose goal it is to fix prices, to limit supply and to limit competition. OPEC was formed in 1960, but its effects were most dramatic in OPEC sought to counterbalance the Seven Sisters. Definitions from Wikipedia

20 Conservation Measures Taken after the Oil Price Shocks of the 1970s Higher taxes on gasoline and fuel oil in Western Europe Fuel efficiency standards for motor vehicles in the US Accelerated adoption of energy-efficient heating for homes, offices, and factories General substitution of energy-conserving technologies for energy-intensive technologies

21 BTU's per $ of Real GDP Oil Prices have less impact on US Economy 20,000 The Energy Intensity of Output has Declined Markedly 18,000 16,000 14,000 12,000 10,000 8,000 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 US Demand for All Fuels This doesn t mean the US is consuming less oil, just that it is more efficient at utilizing oil to produce FactSet Research Systems

22 A few items of note in the Politics of Oil Nasser & the Suez Crisis of 1956 Linkage of 1970s oil price shocks to Arab-Israeli conflict Invasion of Kuwait linked to Iran-Iraq war and resulting decline in Iraqi economy Al Qaeda origins in Saudi Arabia and US-Saudi sponsorship of mujaheddin in Afghanistan US invasion of Iraq ostensibly to resolve issues unresolved by the war in Kuwait