The world’s energy balance’s status is starting to go down the drain. Re-assessment and re-evaluation of the remaining potential crude supplies is being enforced to exploit, acquire and produce these resources. There are three factors that contributed to the depleting production of oil and security of supplies: (a) the recent internal struggle in Iran which interrupted supplies from the world’s second biggest oil exporter, (b) Saudi Arabia’s insistence in its own interest to not produce its oil as quickly possible as consuming countries had previously hoped; and (c) the new wave of oil price increases that have largely reflected the first two factors (Dafter, 1979).
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The internal struggle in Iran posed threats to the oil production. The United States who is capable to produce oil has turned down numerous projects due to two reasons: (a) environmental concerns and regulatory procedures and (b) uncertainties of future energy supply and demand balances. The factors affecting the future energy balance are: (a) rate of energy growth affected by two hard to determine factors; rate of world economic growth and impact of conservation, (b) speed of conventional and alternative energy sources been exploited and developed, (c) OPEC’s willingness to meet higher levels of demand and (d) size of the world’s fossil fuel resource base.
The scope of the supply crises boil down to the issues of foreign policies of major countries evidently affect the oil production in the international market and an increase in price of fuels and the economic growth, as well of the OECD member states. The conservation of oil for future use must consider the oil resource base, cost considerations, prospects for enhancing production and full exploitation of oil resources. The improvement of oil industry is possible with the new and upcoming technology. It is true that the world is depleting its energy balances but we must take note that policy makers should create more comprehensive policies with biased to conservation of oil and its utilization together with the other available forms of energy.
Dafter, Ray. "World Oil Production and Security of Supplies." International Security. Vol. 4. The MIT Press, 1979-1980. No.3. 154-176.
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