A unusually pessimistic economist report on oil!

Discussion in 'Business & Economics' started by Undecided, Mar 22, 2004.

  1. Undecided Banned Banned

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    http://www.economist.com/agenda/displayStory.cfm?story_id=2516309

    Not good news, some have been arguing that oil supply will not be able to satisfy demand in very short order. This imo at least is true, the world has a certain capacity for producing oil (don't confuse reserves with production). With most of the world's oil being within the realm of the Islamic world and with the increase in tensions (when does it ever decrease is the real question) her economies will begin to have what it never had before...options. Before the Middle East had only three real options to sell her oil, to Europe and to the America's or Japan. All of which are traditional allies of the United States, thus politically and economically these states are bound to the US foreign policy directly or not. The new world order is going to greatly destabilize this, and Americans will begin to feel it. Economically the US is a car country; no one can deny Americans like their cars. But Americans have a bad habit of buying big. This is best exemplified by the fact that if Carters gas restrictions, if not repealed by Reagan would have made the US independent of Middle East importations. But alas that sadly that opportunity has gone, and the US is now game to a massive game of money and power struggles with new powers. China as said in the article is now the world's second largest oil consumer. The Chinese are big because they had last year a 13% jump in car sales, and it's still growing. This is best shown in this quote:

    Indeed not only a major factor in the oil market but in the world economy. She can in theory at least greatly challenge American supremacy in the Middle East region. It is expected that China will base her carriers (which are being built now) in Pakistan in the port of Gwadar. America can pull off Iraq's because no other power can or has the will to stay in the region, but as shown before China will move in. But imo at least this will greatly change, Iran will become China's Saudi Arabia. Although personally I don't think the US will suffer too much, because nations like Japan, and the EU (I know it's not a nation) will transform into a green economy faster then the US, or China for that matter. Other states like India which is very close to the Middle East will also exhort power over these states. The economics and geo-politics of oil are interesting even to the most causal of observers.

    Undecided
     

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