First low gas prices is not a big problem
Hurricane Katrina has shown us very clearly that we are very sensitive to all major disruption or decrease oil production. With prices souring since the tragedy of Katrina on the concept of cheap gas is regarded as extinct as the dinosaurs. Hurricane Katrina cut came from a natural disaster, of course, but the biggest threat is a policy.
Somewhat surprisingly, two thirds of oil in place in the world are in cash and around the Persian Gulf and these countries, led by Saudi Arabia, now provide about one quarter of oil today. This flow can be interrupted at any time for a variety of reasons – terrorism, war, internal strife, reductions intentional, to name a few. Many other major oil exporters are the same unpredictable: Russia (the No. 2 exporter), Venezuela (No. 5) and Nigeria (No. 8). Read the rest of this entry »
