Full Title: Intelligence Report: Barrels at Risk
Author(s): Securing America’s Future Energy
Publisher(s): Securing America’s Future Energy
Publication Date: 5/2012
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- The current instability in multiple oil producing regions means that supply disruption vulnerability is particularly high. Flashpoints include Iran, the Strait of Hormuz, Nigeria, Iraq and Libya. If as few as two supply disruptions occurred simultaneously, demand for available spare capacity would be overwhelmed. But, even the threat of a single oil disruption has the ability to push oil prices substantially higher.
- The vulnerability of the liquid natural gas (LNG) market is also high; in the event that the Strait of Hormuz is closed, some 22% of the world’s LNG exports would be trapped. As LNG is frequently transported directly to the point of consumption, there is no such thing as spare export capacity, and many LNG importing countries have no strategic reserves.
- Certain resources are at risk of never being developed for political reasons, particularly in the OECD countries. The United States is a culprit, with political obstacles blocking access to a possible 1.4 million barrels of oil per day.
- While it is impossible to know the full volume of accessible oil and gas reserves currently unutilized, it is clear that global production could be increased.