Cambridge Energy Research Associates has released a study that concludes, after a review of worldwide oil fields, that global capacity can outpace demand over the next ten years. AME Info reports: “Aside from unpredictable disruptions, worldwide production capacity could increase by nearly 25% by 2015, with world supply capable of reaching 110m bpd, up from 89m bpd currently, according to Cambridge Energy Research Associates.”

Okay, sounds good.  That continuing demand surge from countries like China, India, Brazil et al, should be a piece of cake, right?  Not so fast, buster:

The Middle East’s proven crude oil reserves have increased marginally to 742.7 billion barrels as of the end of 2005, latest BP statistics reveal.

That accounts for 62 per cent of the world’s reserves.

But analysts say that despite sitting on huge reserves, the Middle East may not be able to cater to the rising global oil demand due to declining production in other world regions and fewer new discoveries here.

The world’s proven crude oil reserves increased to 1.20 trillion barrels in 2005 from 1.19 trillion barrels in 2004, while the Middle East’s reserves rose marginally from 738.2 billion barrels to the 742.7 billion barrels over the same period.

According to BP statistics, the increase in the Middle East’s reserves is attributed to Iran, where proven crude oil reserves have gone up from 132.7 billion barrels in 2004 to 137.5 billion barrels in 2005.

Full article here.

So, 62% of the world’s oil reserves are in the Middle East, where hair-trigger tempers and resentment of all things American will make it oh-so-easy for the U.S. to feed its oil habit.  Right?  Yeah . . . looks like the Cambridge Energy Research guys probably need to go back to the drawing board and consider political volatility as a factor in determining whether production capacity has a shot at meeting demand.

Advertisements