Oil In the Middle East

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Oil In the Middle East

• Today oil supplies about 40 of the worlds
  energy and 96 of its transportation energy.
• Since the shift to oil, the world has consumed
  over 875 billion barrels.
• Another trillion barrels of proved and probable
  reserves remain to be recovered.

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Oil Consumption

• At current pace from now to 2020, world oil
  consumption will rise by about 60.
• Global consumption of gasoline is projected to
  double.
• The two countries with the highest rate
  consumption of oil are the United States and
  China
• The two nations that are growing the fastest in
  terms of oil use are China and India.
• In the next two decades, China's oil consumption
  is expected to grow at a rate of 7.5 per year
  and Indias 5.5.
• It will be imperative for these countries to
  secure their access to oil.
• http//www.eia.gov/countries/index.cfm?viewconsum
  ptioncabs

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Who has the oil?

• Today, 47.9 of global oil reserves are in the
  hands of Middle Eastern regimes 16 decline in
  share since 1993 (BP Stats)
• Saudi Arabia (16)
• Iran
• Iraq
• Kuwait
• UAE
• Libya
• In the post 9/11 world we are looking to offset
  the growing influence of Middle East producers by
  increasing the production in non-OPEC countries
• http//www.eia.gov/countries/index.cfm?viewreserv
  es
• http//www.bp.com/content/dam/bp/pdf/Energy-econom
  ics/statistical-review-2014/BP-statistical-review-
  of-world-energy-2014-full-report.pdf

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What is OPEC??

• Organization of Petroleum Exporting Countries
• OPEC's objective is to co-ordinate and unify
  petroleum policies in order to secure fair and
  stable prices for petroleum producers and an
  efficient, economic and regular supply of
  petroleum to consuming nations
• Angola
• Ecuador
• Algeria
• Iran
• Iraq
• Kuwait
• Libya
• Nigeria
• Qatar
• Saudi Arabia
• United Arab Emirates
• Venezuela

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Non-Middle Eastern reserves

• 2 Venezuela
• 3 Canada
• 8 Russia
• 10 Nigeria
• 12 United States
• 14 China
• 15 Brazil

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Are they diversified?

• Saudi Arabia 76 of exports are crude petroleum
• Iran 72 of exports are crude petroleum
• Iraq 99 of exports are petroleum
• http//atlas.media.mit.edu/country/irq/

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Top Oil Producers

• 1- Saudi Arabia
• 2. US
• 3. Russia
• 4. China
• 5. Brazil
• 6. Iran
• http//www.eia.gov/countries/index.cfm?viewreserv
  es

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Problem for US

• (Reserves based on Billions of barrels)
• Saudi Arabia produces 11.72 and consumes 2.9 and
  has 267 in proven reserves.
• United States produces 11.12 and consumes 18.5
  and has 26.5 in proven reserves.

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In 2013, US oil production had the largest
increase in the countrys history. The US
produced 84 of its domestic energy demand, up
from the all-time low of 69 in 2005
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Russia !!!

• Many have even suggested that Russia could take
  on OPEC and help shift global oil supply away
  from the Middle East.
• http//www.eia.gov/countries/index.cfm?topLexp
• Russias is the second largest exporter behind
  Saudi Arabia.
• It will be impossible to sustain it because
  Russia ranks eight in proven oil reserves,
  holding only 5.
• Its reserves have been steadily declining since
  1999. That means that at current production
  rates, Russia may be running out of substantial
  reserves by 2020

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Is this real?
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How about Africa???

• Our search for reliable oil suppliers outside the
  Middle East has brought about an oil boom in many
  African countries
• Angola, Nigeria, Angola, and Libya are the
  largest. Africas total reserves amount to 7 and
  its largest producer, Nigeria, will peak by the
  end of the decade. Africa could be running out of
  substantial reserves by 2025.

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How long do we have? (Pessimistic view)

• How long proven reserves would last at current
  production rates is debatable
• Some estimate 15 years for non-Middle East
• 40-80 years for Middle East producers
• If production continues at today's rates Russia,
  Mexico, U.S. China and Brazil could cease to be
  relevant players in the oil market in less than
  two decades.
• At that point, the Middle East will be the only
  major reservoir of abundant crude oil giving them
  abundant power.

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Optimism
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Nightmare scenario

• A handful of Middle East suppliers will be able
  to dictate the terms on world oil markets and
  manipulate oil prices and world politics.
• Middle Eastern producers will use their oil
  revenues to increase their military expenditures
• Corrupt, oppressive regimes will continue to use
  oil revenues as a means to maintain their power.
• Wealth generated by oil rich Middle Eastern
  countries will continue to flow into terrorist
  organizations.
• The U.S. will need to keep increasing American
  military presence in the region to ensure our
  access to the remaining oil.
• Tension between the U.S. and China due to growing
  Chinese intervention in the Middle East to ensure
  its own access to oil.
• When consumption begins to exceed production the
  price of oil could soar above 100 a barrel. A
  global recession would follow.

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• http//www.usatoday.com/story/money/business/2014/
  06/28/the-world-was-533-years-of-oil-left/11528999
  /
• http//www.wsj.com/articles/why-peak-oil-predictio
  ns-haven-t-come-true-1411937788
• http//www.forbes.com/sites/lorenthompson/2012/12/
  03/what-happens-when-america-no-longer-needs-middl
  e-east-oil/
• http//www.aljazeera.com/indepth/opinion/2013/01/2
  013116152324850803.html

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Movie

• http//www.youtube.com/watch?vrSQ0KtnaMVc
  (Fiction)