Date: Mon May 05 2003 11:23
trotsky (skinny@OPEC) ID#377387:
the hope that Iraq's oil could make a difference w.r.t. OPEC's power to control the oil market is imo misplaced, or a miscalculation. OPEC will control a bigger and bigger pecentage of the market regardless of what Iraq does, due to oil production having peaked at several large non-OPEC competitors ( Norway, the biggest non-OPEC exporter is losing about 10% of its production per year now, and North Sea & Mexico have peaked as well ) . the ultimate oil power broker remains Saudi Arabia, owing to the fact that it has the largest spare capacity. if a future Iraqi govt. decides not to play ball, they better take note of history: Saudi Arabia is known for its propensity to punish non-compliant producers by simply flooding the market ( although they can't really afford to financially, they seem to take a very long term view of the oil market - and they won't let anyone damage their control of it ) . it's also quite likely that Russia, now that it has seen what a disciplined OPEC can do, will in future tacitly conform with the quota system - without officially joining OPEC of course.
lastly, if i had a cent for every time OPEC was declared to be 'finished' by the ,ahem, experts, i could probably retire.
Date: Mon May 05 2003 12:38
trotsky (golden goose @oil) ID#377387:
i forgot nothing. the world's oil geology is pretty well mapped by now - i.e. we not only know what has been found and used so far, we also know what's left. non-conventional sources like the tar sands ( which only become economical at far higher prices ) are included in those estimates, and amount only to a fraction of the crude oil left to be extracted ( the precise figure is 300 billion barrels of unconventional oil vs. approx 900 billion bbl. of conventional oil, of which 500 bn. are in the Mid East - and there's the heavy contaminated sludge in Venezuela's Orinoco belt, which is a lot, but requires a very high price to become economical ) . conventional oil discoveries have peaked in the 1960's, almost 40 years ago. currently only 1 bbl. is discovered for every 4 that are consumed.
and just to put Iraq's estimated reserves ( the world's second largest ) of approx. 90 Giga-barrels into perspective: the world currently uses about 26 Gb per year and will use 40 Gb. per year by 2010 if current demand trends persist.
so no doubt unconventional oil WILL be recovered eventually, mostly because there will be no choice in the matter. but there can be no doubt that OPEC's market share is bound to increase greatly. current estimates are that OPEC will cross the 50% market share threshold by 2007, about 4 years before the Mid East's production peaks as well ( it's the last region set to peak ) . |
