IN THE NEWS / American Petroleum Institute Briefing
The following is a brief report which was published by API in
November. Due to the current situation related to Iraq, I thought it
may be interesting for some of the visitors here at the Korner.
Questions and Answers on World Oil Supplies
Q: How much crude oil does Iraq export?
A: Iraq is permitted under post-Gulf War sanctions imposed by the
United Nations to export only about 2 million barrels a day, or 2.5
percent to 3 percent of world crude oil consumption. The United
Nations has oil monitors in place who are observing Iraq's oil for
food program. They have been instructed to remain. Iraq had said it
would halt production if those monitors were withdrawn because it
wants to ensure that the oil-for-food program continues.
Q: Could other sources of crude oil increase production if Iraq's
exports are disrupted?
A: Yes. Other OPEC countries and those non-OPEC producers (including
Mexico, Norway, Russia and others) that tried to cut production
earlier this year by 3.1 million barrels a day—in an attempt to raise
crude oil prices—could step up their production quickly. But there is
no guarantee that these countries will choose to produce more.
Q: What if other Persian Gulf supplies were jeopardized?
A: If military actions disrupted oil supplies from other Persian Gulf
countries—either because of physical damage from hostilities or by
reductions in output for political reasons—then a major reduction in
world oil supplies is possible. Such a reduction—should it occur—could
leave daily world demand well above supply, creating strong upward
pressure on world oil prices.
Q: How much oil do the nations of the Persian Gulf produce?
A: Persian Gulf countries—Saudi Arabia, Iran, Iraq, United Arab
Emirates, Kuwait, Neutral Zone, Qatar—produce about 18.8 million
barrels a day, or 25 percent of world demand.
Q: How much oil does the United States consume and how much does it
import?
A. Last year, the U.S. consumed 18.6 million barrels a day, including
10.2 million barrels a day of imported oil. U.S. oil imports are
higher than they need be because the federal government, and some
state governments, have denied oil producers access to potentially
rich supplies of crude oil offshore and in Alaska.
Q: What countries supply the U.S. with imported oil?
A: In August 1998, Venezuela supplied the most of any single
country—15.5 percent of total U.S. imports. Canada contributed 14.4
percent and Mexico provided 10.6 percent. Saudi Arabia was the source
of 13.9 percent of U.S. imports, and Iraq added 6.6 percent. Overall,
OPEC countries provided almost half (48.3 percent) of the nation's
total oil imports in August. Persian Gulf countries were the source of
23 percent.
Estimated Crude and Products Imports
by the U.S. from Leading Supplier Countries
August 1998
% of
% of Domestic
Imports Total Product
(MB/D) Imports Supplied
1 Venezuela 1,683 15.5% 8.8%
2 Canada 1,555 14.4% 8.1%
3 Mexico 1,153 10.6% 6.0%
4 Saudi Arabia 1,500 13.9% 7.9%
5 Nigeria 736 6.8% 3.9%
6 Iraq 713 6.6% 3.7%
7 Angola 422 3.9% 2.2%
8 United Kingdom 371 3.4% 1.9%
9 Colombia 360 3.3% 1.9%
10 Norway 287 2.7% 1.5%
OPEC Countries 5,228 48.3% 27.4%
Persian Gulf Countries 2,486 23.0% 13.0%
January-August 1998
1 Canada 1,608 15.5% 8.7%
2 Saudi Arabia 1,499 14.4% 8.1%
3 Mexico 1,340 12.9% 7.2%
4 Nigeria 755 7.3% 4.1%
5 Angola 434 4.2% 2.3%
6 Colombia 307 3.0% 1.7%
7 Algeria 305 2.9% 1.6%
8 Virgin Islands 304 2.9% 1.6%
9 Kuwait 304 2.9% 1.6%
10 Norway 240 2.3% 1.3%
11 Iraq 227 2.2% 1.2%
OPEC Countries 4,825 46.4% 26.0%
Persian Gulf Countries 2,042 19.6% 11.0%
* Supplier of products made from crude oil
Source: DOE, Petroleum Supply Monthly, October 1998
The attached table lists estimated crude imports by the U.S. from its
leading suppliers in August and the first 8 months of 1998.
Q: How much oil does the world consume?
A: World demand is about 74 million barrels a day.
Q: How large are global oil inventories?
A: Petroleum industry inventories in countries that belong to the
Organization for Economic Cooperation and Development—Australia,
Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France,
Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea,
Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland,
Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom and the
United States—are 6.5 percent higher (or 170 million barrels higher)
than one year ago.
Overall, governments around the world own or control 1 billion barrels
of crude oil, and 0.2 billion barrels of petroleum products. The
United States has a Strategic Petroleum Reserve (SPR) that holds 563
million barrels, about a 55-day supply of imported oil. That is a
significant amount, although less than the 90-day supply of imported
oil the SPR originally was intended to hold.
Q: What impact would hostilities with Iraq have on the price of oil
and gasoline?
A: Supply and demand in the marketplace determine the prices of crude
oil and the gasoline from which it is refined. Currently, both prices
are near historic lows. |
