World Price of Oil
S. FRED SINGER
There is no scarcity of oil in the world today; excess production capacity is about 20 percent. The probable reserves are adequate for about fifty years; before they expire, other energy resources will take the place of oil. Our major problems are the security of the oil supply, and the high price that has been set arbitrarily by the OPEC oil cartel.
The United States uses about 16 million barrels of oil per day, of which over 40 percent, over 6 million barrels per day, is imported--nearly 2 million barrels per day from Arab countries that have embargoed oil in the past. Therefore, 10 percent of our oil supply, roughly 5 percent of our energy supply, is currently insecure, but this proportion is increasing. By contrast, Europe imports 14 million barrels per day and Japan 5 million barrels per day with little or no domestic production, and therefore a much weaker security position. The developed countries, essentially the Organization for Economic Cooperation and Development ( OECD), will depend on Middle East oil for the next fifty years, principally on oil from the Arabian peninsula.____________________