Global Energy Crunch
“The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.”
“Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.”
Decline More Rapid Than Estimated
The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.
Implications for UAE and Oil Rich Nations
“In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.”
“‘The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future,’ he said.”
This important article draws from an assessment of global oil reserves, looks at the implications of the recession on the oil industry and oil-thirsty consumers and predicts the inevitability of rising oil prices.
Read the entire article:
Steve Connor, Warning: Oil Supplies are Running Out Fast, The Independent, 3 August 2009.
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Fujairah a Great Base for Getting to the America’s Cup Venue at RAK, Fujairah in Focus, 11 August 2009.
Dr Geoff Pound
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Image: “The decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.”
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