Is there an oil glut, not an oil shortage

Journal Article · Sun Jan 01 04:00:00 EST 1978 · Across the Board; (United States)

OSTI ID:6410065

Fiedler, E R

To conclude that a shortage of oil does not exist--represents a simplistic piece of reasoning. But that does not mean it is wrong. There is, in fact, evidence supporting it. The existence of large inventories of petroleum and petroleum products in the United States is one such piece of evidence. Another is the very sizable volume of shut-in production capacity in the Arabian Peninsula (Sauda Arabia, Kuwait, United Arab Emirates, and Qatar). Crude oil is being pumped there today at only about 75 percent of capacity. The existence of so much unused capacity clearly indicates that in terms of an accessible supply there is a glut of oil, but control over that supply is concentrated in such a way that a small cartel of countries holds monopoly power over it--the power to create a shortage, compel high prices, and reap enormous profits. There is, in other words, a surplus in the ground but a deficiency in the marketplace--a natural glut but an artificial shortage. All of this leads to 5 major conclusions. Long-run prospects for the availability and price of oil cannot be certain; planning should be done on the expectation that energy will remain costly; our dependence on OPEC is serious because we remain vulnerable to another embargo; it is unwise to base our domestic energy policies on the hope that everything will turn out for the best; and our energy policies should incorporate a maximum degree of flexibility. Options should be kept open. (MCW)

• OSTI ID: 6410065
• Journal Information: Across the Board; (United States), Journal Name: Across the Board; (United States) Vol. 15:1; ISSN ACBOD
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020100 -- Petroleum-- Reserves-- (-1989)
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002* -- Energy Planning & Policy-- Petroleum
ALLOCATIONS
CARTELS
DEMAND FACTORS
ENERGY SHORTAGES
ENERGY SOURCES
FORECASTING
FOSSIL FUELS
FUELS
GLOBAL ASPECTS
INDUSTRY
INFLATION
INTERNATIONAL ORGANIZATIONS
INVENTORIES
MARKET
MONOPOLIES
OPEC
PETROLEUM
PETROLEUM INDUSTRY
PRODUCTION
SUPPLY AND DEMAND