Industrial Nations Can Now Withstand Oil Flow Disruption
Ibrahim, Yousef M., THE JOURNAL RECORD
PARIS - New realities affecting world oil supplies have put the industrial countries in a position to withstand even a major disruption of the flow of petroleum from the Persian Gulf, according to senior officials in the United States and other Western countries.
Unlike the painful shocks that sent Western economies reeling when Middle Eastern crude was withheld from world markets in 1973 and 1979, the Western industrialized countries today could draw on billions of barrels of oil stored in the United States, Western Europe and Japan, as well as a large amount of unused oil-producing capacity in countries outside the gulf.
U.S. officials have said they increased the number of American naval vessels in the gulf this year to assure that the flow of oil is not interrupted. However, the buildup in the gulf of American and other Western naval forces has also been explained in political-military terms: to maintain Western influence in waters in which the Soviet Navy has also become active and to reassure Arab countries that were upset by the disclosures that the United States had been selling weapons to Iran.
As of Nov. 1, the 24 countries of the Organization of Economic Cooperation and Development, which include the Western democracies and Japan, had 3.3 billion barrels of oil stored in underground salt domes; tanks by the hundreds from Rotterdam, the Netherlands, to the Caribbean, and in pipelines, tankers and other oil company facilities.
This storage is enough to supply all 24 countries for 97 days at present rates of consumption - a situation that is strikingly different, many experts said, from the vulnerable days of the 1973 Arab oil embargo and the Iranian revolution, which interrupted the flow of about 6 million barrels of Iranian oil a day in 1979.
Based on strategic studies and the experience of the seven-year-old Iran-Iraq war, these officials believe that a major disruption could not outlast the 97 days of reserves on hand. They added that countries such as Nigeria, Mexico and Venezuela with unused oil production capability would be quick to take advantage of the sudden increase in demand for oil. …