Friday, October 18, 2013

US Passes Saudi Arabia to become the World’s Largest Oil Producer

"PIRA, a leader in worldwide energy market analysis, has recently announced that the US has finally surpassed Saudi Arabia as the largest oil producer in the world, after an explosion in the use of hydraulic fracking created the largest oil boom in nearly 40 years, only beaten by the production boom in Saudi Arabia between 1970 and 1974."

Should the U.S. join OPEC next?  

This is an important milestone: within five years the U.S. will resume its role as a net exporter of petroleum for the first time in over four decades.  The flow of oil through the Arabian Gulf will no longer be considered  a necessary beverage for U.S. consumers but something of necessity for the rest of the world - and this Administration is very keen to push such responsibilities on others.  

If KSA cannot defend itself, nor cooperate in a regional alliance, the obvious candidates become their prime customers in the Far East: China, Japan, South Korea, and India.  These nations either lack the will or prowess to project decisive naval power to the Gulf.  

Long term, Saudi oil production is declining while domestic consumption continues to rise.  Around 2030 Saudi Arabia may even become a net importer of crude!  

What will happen then?  For comparison, early in the colonial period the West Indies was home to rich and lucrative sugar plantations, a strategic asset prize contested between European powers in war and peace, so highly valued that at the end of the Seven Years' War France yielded its sovereignty of mainland Canada to Britain in exchange for retaining its sugar islands of Martinique and Guadeloupe.

After the development of sugar beet in Europe and cane sugar plantations elsewhere the importance of the West Indies dropped and the region once again became a backwater.  Early in the 20th century Europeans pretty much yielded primacy in the area to the local up-and-coming power, the United States.  Spain lost Cuba in a war and didn't try to win it back.  Denmark sold its islands to the America. In WWII Britain offered the U.S. its naval bases in exchange for American-built destroyers. 

And the oldest independent Caribbean state, Haiti, hit by civil unrest, suffered for a generation the indignity of U.S.-European invasion and occupation, followed by disorder, mass slaughter (by its neighbor), dictatorship ("Baby Doc"), and currently another foreign occupation (this time by Brazilian-led U.N. forces.)

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