Iranian President Ahmadinejad says we need him more than he needs us. Guy Caruso, the EIA chief agrees with him:
WASHINGTON (Reuters) - A disruption in Iran's crude oil exports because of a dispute over that country's nuclear program would affect an already tight global oil market and lead to higher petroleum prices, the head of the U.S. Energy Information Administration warned on Tuesday.
"The market is so tightly balanced, clearly, we can't afford to lose a large supply of crude to the market," EIA chief Guy Caruso told Reuters in an interview.
Even though the United States does not directly import Iranian crude, Caruso said a cutoff of Iran's oil would affect the U.S. market because other countries that buy Iranian crude would compete with America to find new supplies.
"It's a fungible world oil market, and any disruption in supply affects everyone, because the price would go up for everyone," he said.
No kidding. Boy, that EIA chief sure does know his economics.
I sure am getting tired of this meme about Iran having so much pull in the oil market.
Let's look at the numbers from the EIA website:
Iran produces 4 million barrels of oil a day.America is the 3rd largest oil producing nation at 8.59 million barrels a day. Iran is the 4th largest oil producing nation. We produce twice the amount of oil Iran produces. We use 20 million barrels a day, which means we import 12 million barrels a day.
Saudi Arabia produces 10 million barrels a day, and Russia produces 9 million a day. Russia exports almost 7 million barrels a day. There are 14 oil exporting nations which export more than 1 million barrels a day. Half of them are non-Opec countries.However, Venezuela is one of the major exporting countries, as 2.3 million barrels a day, and they aren't exactly our friends either. America imports oil from over 100 nations.
Iran represents less than 3% of the total oil in the world. In fact, it is somewhat less.
Why would losing 3% of the worlds oil render the United States incapable of acting?
Exactly. Yes, there would be a small change in the economics of oil for the world and not just America. But we would weather the change with minor pain. The Iranian economy would take a large hit as oil is a major part of their exports.
ReplyDeleteThey need us more than we need them.
It's also about time that our political leaders talk about making sacrifices. Our men and women are risking their lives in Iraq and Afghanistan. And their lives will be put at risk with Iran getting nukes. It's about time the American people accept the fact that they might have to tighten their belts for the cause.
Jason,
ReplyDeleteIsn't it amazing how this meme get out, and everyone just believes it. No one even checks the numbers for themselves, they just instantly fall into defeatism.
How much you wanna bet that EIA guy hates Bush?
"Why would losing 3% of the worlds oil render the United States incapable of acting?"
ReplyDeleteIt wouldn't. But it would raise prises much. much more than 3%. Will most Americans support long-term efforts against Iran if gas was $4 a gallon? Yes for a week. Maybe for a month. For 3 months? For 6? High energy costs raise inflation aross the board. How long can we keep this up under the best of circumstances.
Plus how much money will we be pouring into the Saudis, Russia, Venezuala, etc under these conditions? Punish Iran by rewarding the Saudis? What a raw deal!
First of all, remember that China and India take from the world's supply of oil. As a matter of fact, much of the old-style industrial-revolution manufactoring has gone to foreign shores. Many countries will suffer.
ReplyDeleteBut it won't be a great as you think and as long as you think (I'm talking about the disruption from taking out nuclear facilities.) Once the nuclear program is taken out and Iranians get tired of starving, they will sell their oil again ... or they might overthrow their government. Disrupting the oil from Iran might just be the straw that broke the camel's back. Remember, the Iranians are disatisfied but as long as the economy is OK, they don't have wide support. That's why the Iranian gov't is selling oil now ... it just has to.
If I EVER heard Stanley Baldwin that is it.
ReplyDeleteThe economic considerations trump all. We can't build those Spitfire engines because military expenditures are inefficient labor users. Besides, we can work with the germans er, Iranians.
Is a smoking Harrisburg worth $70 oil instead of $110 oil?
This person is not fit to be in govt.
I am INCENSED!
Epa,
ReplyDeleteI agree. This guy is clearly against the Bush agenda, which, of course, means he is against the will of the American people who elected Bush, knowing his agenda.
The guys statement is irrational hype. He ought to be fired. He is trying to demoralize our country during time of war.
Thomas,
ReplyDeleteDid you know that we don't buy oil from Iran, and haven't done so since the late 90's?
Also, did you know Iran has to buy processed petroleum? They will run out of gasoline and other petro products in a month or so.
ReplyDeleteI believe that will hurt them more than the lack of cash from the sale of their oil because they have made a killing on the oil market the last few years. So they have a nest egg built up to buy more weapons from Russia with.
While their population walk and starve.
In the dark.
And get even more pissed at America.
It won't take long until they give their military the go to cross the Iraqi border.
In Iraq, we will see who is our enemy and who is our friend when Iran is sanctioned.
When the Iranians cross the border, then we will see who fights with them.
Papa Ray
West Texas
USA
I hate to say this...but would the world be better off if the europeans just TOOK THE DAMN OIL FIELDS?
ReplyDeleteThey are the buyers of that oil. It's their economies.
Are we missing somethign here about nation states as a world system reaching a point of world cataclysm?
Or are there just too many rats in a cage and this has to happen?