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Most
of the world’s oil and gas is on the Middle East
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WASHINGTON,
October 22 (IslamOnline & News Agencies) – Western oil companies
are showing no intentions of veering away from the Middle East, industry
executives said, according to a U.S. newspaper.
The
New York Times published a report saying that despite the Bush
administration making the broadening of the sources of America's oil
supplies a touchstone of its energy and foreign policies, officials
concede that progress has been slow.
"I
believe that the administration's emphasis on increasing and
diversifying global energy supplies is having a positive impact on
investment decisions — but this impact is difficult to quantify,"
Spencer Abraham, the energy secretary, said in an interview, reported
the paper.
Recently,
the administration has encouraged efforts to import more Russian crude
oil to the United States and announced plans to open a new consulate in
oil-rich Equatorial Guinea. American oil companies say that they welcome
such efforts, it said.
"But
the proportion of United States oil imports flowing from the Middle East
remains high — about 24 percent, down from levels during the oil
crises of the 1970's, but up by a third over the last few years. And oil
executives say that they have not markedly changed their plans for where
to seek out, produce and purchase oil," said the Times.
"Diversifying
supply is important for any country, and the industry is looking at
other things besides the Middle East," said Clarence P. Cazalot
Jr., chief executive of the Marathon Oil Corporation, a Houston-based
energy company pursuing projects in the Middle East, West Africa and
most recently Russia.
"But
at the end of the day, oil has to come from where oil is available, and
most of the oil and gas in the world is in the Middle East,"
Cazalot added. "It's just an inescapable fact of life."
American
companies have invested comparatively little in the Middle East, largely
because the area's state-run oil companies are only now mulling
partnerships with foreign oil concerns for the first time in decades.
Indeed, oil executives say that from their perspective, diversification
means greater involvement in the Middle East, not less, and that the
region's vast oil holdings overshadow its history of turbulence, the
paper said.
The
United States, the world's largest consumer of petroleum, imports most
of its oil, a trend that has grown over the last 30 years as consumption
ballooned and domestic production slipped. Oil from Canada, Mexico,
Venezuela and Nigeria together accounts for more than 50 percent of
imports, the Times reported.
The
paper said that the U.S. administration has also promoted Kazakhstan and
Azerbaijan as stable sources of oil and gas for the West. Since the
mid-90's, Western companies have invested more than $18 billion in the
two Caspian nations, adding more than 600,000 barrels a day of
production to world markets.
According
to the paper, Middle Eastern oil producers are not panicked by the new
urgency in the United States about diversification, one oil executive
from the region said. He pointed out that even if the United States
imported less oil from the Persian Gulf, it would remain indirectly
dependent on Middle Eastern states to produce enough oil to keep world
prices stable.
Ever
since the second Palestinian Intifada against Israeli occupation started
two years ago, there has been much talk among analysts about using oil
as a weapon to put pressure on the United states to influence Israel to
stop its aggressions against the Palestinian people.
Last
April, speaking on the sidelines of an Organization of the Islamic
Conference (OIC) meeting on terrorism, Iranian Foreign Minister Kamal
Kharazi said that Iran could consider using oil as a weapon to force the
United States to pressure Israel into withdrawing from Palestinian
territories it occupies.
Kharazi
said the use of Arab oil to turn the screws on the U.S. and Israel would
depend on a collective decision by Islamic countries, Agence
France-Presse (AFP) reported.
“If
they decide to use oil as a weapon, certainly Iran will consider it. It
will be effective if all Muslim countries would take such a
decision," he said.
However,
several Gulf countries have rejected the offer, saying that oil is not a
"weapon".
In
a previous interview with IslamOnline, Maghawri Shalaby, an Egyptian
economic analyst, said that the oil weapon must be used as a unified
Arab and Islamic position.
“However,
using it must follow certain conditions in order for it to be
effective,” said Shalaby, adding that main Arab producers such as
Kuwait and Saudi Arabia must also be part of the plan.
In
the United States, he said, there are two major trends with regards to
importing oil. The first is to maintain the oil flow coming in from
Saudi Arabia and Kuwait, and the other trend is to depend on oil coming
in from the Caspian Sea and Russia.
“The
other trend’s argument is very weak, therefore the Gulf’s petroleum
is extremely important,” he said.
But,
he said, it is unlikely due to the current world-wide economic crisis
that the Gulf countries will be ready to give up the oil sale revenues.
“The
West have taught us that economy and politics don’t mix and that we
can’t get emotional when we talk about politics,” he said.
Despite
reports saying that the Middle East will remain critical to U.S. oil
needs for the foreseeable future, there is still an Arab reluctance to
use this weapon.
According
to a report issued by the Brookings Institution study, also in April,
despite the rising prominence of Russia and the Caspian Sea, the Middle
East holds from two-thirds to three-quarters of all known reserves, said
the report entitled ‘Energy and the Environment’.
Brookings'
economists estimated world crude prices could spike to 75 dollars a
barrel if another Middle East crisis were to remove up to seven million
barrels a day from the market.
The
scenario assumed no other sources were available, and it held true even
if the United States decided to draw down some 2.5 million barrels a day
from its national reserves.
"A
big increase in U.S. output could heighten competition for OPEC
[Organization of Petroleum Exporting Countries] in the short to medium
term, thereby moderating oil prices somewhat," the report said.
"But
U.S. oil production is simply too high-cost [and reserves too limited]
for increases in domestic output to affect OPEC much, especially over
the long haul," it added.
"The
gap between what the United States now produces and what it consumes,
nearly 10 million barrels a day, is too wide to be bridged."
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