Category: World oil Markets

The International Energy Agency released a report on the world’s oil fields that contains some shocking numbers about the supply and demand for oil over the near term future. Basically the major oil fields are in a death spiral and are being drawn down much faster than previously estimated. Unless the nations of the world can adjust to dire conditions in a hurry the world economy will face overwhelming challenges in the very near term.

Here is the first part of the International Energy Agency report. It is not pleasant reading.

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The World’s Energy System is at a Crossroads.

Current global trends in energy supply and consumption are patently unsustainable — environmentally, economically, socially. But that can — and must — be altered; there’s still time to change the road we’re on.

It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution. This World Energy Outlook demonstrates how that might be achieved through decisive policy action and at what cost. It also describes the consequences of failure.

The United Arab Emirates, which includes Dubai, may not be all that well known in the US but the UAE is an important Mid Eastern crude oil producer. The following information comes from the US government’s Energy Information Agency (EIA) most interesting and informative website.

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+ The UAE holds the fifth largest proven oil reserves in the Middle East and the fifth largest proven natural gas reserves in the world.
+ The United Arab Emirates plans to increase production capacity further over the next seven years.
+ The Dolphin Project pipeline, the first cross-border natural gas pipeline in the Arab Gulf, is slated to import two billion cubic feet per day to the UAE from Qatar by the end of 2007.
+ UAE electricity demand is growing rapidly, and the government is spending billions of dollars to meet future demand.

The United Arab Emirates (UAE) is an important oil producer with the fifth largest proven oil reserves in the Middle East. The UAE is a member of the Organization of the Petroleum Exporting Countries (OPEC) since joining in 1967. The emirate of Abu Dhabi is the center of the oil and gas industry, followed by Dubai, Sharjah, and Ras al Khaimah. In 2004, natural gas supplied 64 percent of the country’s total energy consumption, and oil supplied the remaining 36 percent.

Iran, one of OPEC’s founding members, holds the world’s third largest proven crude oil reserves, and the world’s second-largest natural gas reserves. Why do you thing the Bush oilmen administration has such an interest in Iran?

The following information is kindly supplied by the US government’s Energy Information Administration.

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Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC), and ranks amongst the world’s top three holders of proven oil and natural gas reserves. Iran is OPEC’s second-largest exporter after Saudi Arabia, and is the fourth-largest exporter of crude oil globally after Saudi Arabia, Russia, and Norway.

Natural gas accounts for half of Iran’s total domestic energy consumption, while the remaining half is predominately oil consumption. The continued exploration and production of the offshore South Pars natural gas field in the Persian Gulf is a key part of in Iran’s energy sector development plan.

According to Oil and Gas Journal, Iran has 136 billion barrels of proven oil reserves, or roughly 10 percent of the world’s total proven petroleum reserves as of January 1, 2007. Iran has 40 producing fields, 27 onshore and 13 offshore, with the majority of crude oil reserves located in the southwestern Khuzestan region near the Iraqi border. Iran’s crude oil is generally medium in sulfur content and in the 28°-35° API range.

Iran is OPEC’s second-largest producer after Saudi Arabia. In 2006, Iran produced an estimated 4.2 million barrels per day (bbl/d) of total liquids, of which 3.8 million bbl/d was crude oil, equal to 5 percent of global production.