Day: February 20, 2014
Something Americans will like
Deputy Secretary of State Bill Burns gave a fine speech yesterday at CSIS on “A Renewed Agenda for U.S.-Gulf Partnership” heavy on security, resolving regional conflicts and supporting “positive” transitions (you wouldn’t want to use the D word in the Gulf). Too bad the agenda bore so little semblance to the changing reality.
The Gulf will of course remain important to the US and to the rest of the world. Its oil resources are the life’s blood of much of the global economy. An interruption in supply, as Bill rightly pointed out, would cause an increase in oil prices worldwide, with possibly catastrophic impacts on growth and investment.
But the political economy of Gulf oil is changing. The United States is importing less of it, down now to about 20% coming from the Persian Gulf. And that represents a shrinking percentage of total US oil requirements, as our own oil production is increasing rapidly. Asia is importing more Gulf oil. China takes the lion’s share of Hormuz-transported oil, India another big chunk. The International Energy Agency forecasts that 90% of Persian Gulf oil will go to Asia within a generation. Why would such a dramatic shift in oil trade not affect geopolitics? Read more
RSS - Posts
