Significance of US/Venezuela oil connection is worthy of note
Fred Cederholm, writing in The Weekly Observer in Creston (Ogle County), Illinois (USA) says:
I’ve been thinking about considerations. Actually I’ve been thinking
about the prevalence of oil-related considerations in America’s
strategic, military, diplomatic, and economic decision making
processes. I have previously pointed out that two-thirds of our current
oil consumption needs are met by imports of foreign oil and
distillates. While oil may not "always" be the driving force behind our
global actions, it is a primary consideration -- it has to be!
Of the 21 largest known/producing oil fields on the planet; 4 are in the Americas (Brazil, Venezuela, Mexico, and Alaska), 3 are in former Soviet Union Republics, and 14 are in the Middle East (6 in Saudi Arabia, 4 in Iran, 2 in Iraq, 1 in Kuwait, and 1 in Abu Dhabi). In
1996, the US was still the world’s largest oil producer ... but not
anymore. The growth of our consumption has far outstripped our
production and requires more and more of the world’s oil production and
reserves, but the character of the oil’s origins to quench that thirst
In 2004, the three largest oil suppliers (to the US market)
are Canada, Mexico, and Venezuela -- in that order. Saudi Arabia was
4th and Nigeria and Iraq a distant 5th and 6th respectively.
Considerations of proximate location,
distribution network, and strength of the US dollar relative to the
Canadian dollar are co-factors in that seller-buyer relationship; but
the constraints of Canadian oil production capabilities and the huge
thirst for it in the US market gives new meaning to the phrase "drink
The US/Mexican oil connection has escalated in
the past fifteen years. It gives Mexico the potential for a great deal
of leverage. I wonder how much our need for Mexican oil has impacted
the US decision process regarding illegal alien amnesty, the "openness"
of our shared border, the mid 1990s bailout/intervention on behalf of
the Peso, and the adoption of NAFTA -- remember that "great sucking
sound" described by H. Ross Perot.
Was that from job loss, or oil?
The significance of the US/Venezuela oil
connection is also worthy of note. The proximity of this source of
imported oil to our Gulf of Mexico oil portals gives them major "ace in
the hole" status.
Is there any wonder behind Washington D.C.’s recent concerns (and the US press coverage) regarding Venezuela’s general strike and the stability of the Chavez government and his support and ties to Castro in Cuba?
The significance of US imports of Nigerian oil
were a real surprise to me ... about 9% of our oil imports have been
coming from Nigeria in recent years. Oil-rich Nigeria has been hobbled
by political instability, corruption, deficient infrastructure, poor
economic management and HIV/AIDS. It is Africa's most populous country
and has more than 250 ethnic groups. The April 2003 elections marked
the first civilian transfer of power in Nigeria's history.
Oil discoveries and development in former
Soviet Union Republics are making them an ever-increasing player in the
world’s oil market -- but more so for Europe than the US -- at least
for now. In 2004, they rank 13th on our list of petroleum suppliers.
While internal squabbling and the recent arresting of oil company
executives have hobbled their growth, their biggest bottleneck is one
of distribution. Europe and the US both want and need their oil, but to
properly service those markets the Russian Republics’ oil companies
"need" pipelines across Turkey and/or Afghanistan. TH*NK about the consideration implications of that one!
I noted earlier that the US has one of the 21
largest known/producing oil fields on the planet. That is Prudhoe Bay
in Alaska and it is ranked 21st. Consider that while the US is the now
world’s largest oil importer, we sell up to 7% of our Alaskan oil to
our good friends in Japan, the Koreas, and China. They are, after all,
our good friends -- "isn’t that special!"
I’m Fred Cederholm and I’ve been thinking ... you should be thinking, too.
Cederholm is a CPA/CFE, a forensic accountant and writer who
contributes the column "TH*NK*NG" to The Weekly Observer in Creston,
(Ogle County) Illinois. He is a graduate of the University of Illinois
(B.A., M.A. and M.A.S.) and can be reached at email@example.com
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