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Page added on June 29, 2008

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The era of oil wars

Growing competition for oil may escalate to something as hot and dangerous as nuclear proliferation


Gordon Brown meeting Britain’s oil chiefs to discuss higher North Sea output to bring down prices is prompted by oil prices hitting a record high of $135 a barrel, twice as high as a year ago and a staggering 12 times higher than a decade ago. The well-sourced website petrolprices.com is now predicting that petrol will reach


The geopolitical implications of this gathering crisis for world oil supply 2010-15 are immense. The risk of further military interventions and conflicts in the Middle East is clearly high. Total world oil reserves are estimated at 2.5-2.9 trillion barrels, of which half has now been already consumed, while half of the 51 oil-producing countries reported output declines in 2006. Non-Opec production is expected to peak and decline within the next five years, driven mainly by burgeoning demand from China and the US, together with restricted output from Iraq. Then in the following five years Opec’s diminishing spare capacity will probably become increasingly unable to accommodate short-term fluctuations, depending on how fast world demand grows and how extensively Opec invests in new capacity. The latter may well not raise production capacity high enough or quickly enough, whether for political reasons or because internal decision-making is too slow or the security environment too hostile.


Guardian



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