Is the US Ready for Chaotic Oil Markets :: essays papers

Is the US Ready for Chaotic Oil Markets The cost of gasoline to provide a many of services, transportation being most popular, is effecting our nation dramatically. One of the major reason’s for these soaring prices is due to Saddam Hussein calling the Arab states to use oil as a major weapon for countries who do not support Israel. America has itself involved with an insurance providing protection to import cut offs yet at this period of time, the oil reserves can only provide the replacement of 53 days using reserve. That is defiantly not enough to hold us over in need. Almost seventeen years ago, the number of days that our reserves provided us was more than double than it is today, mostly due to the increase in demand. This is the principal reason that the reserve does not provide the amount of protection that it had before. Domestic oil production now stands at about 6 million barrels per day ,one-third less than in 1985 , while the United States imports about 9 million barrels per day, more than 2 ½ t imes as much as it imported in 1985. With all these factors present, it is almost an obvious indicator that a crisis may be forthcoming with the impact of Saddam Hussein’s power. Saddam Hussein mentioned Sunday in an Iraqi broadcast, â€Å"The world knows and uses the language of economics, why don’t the Arabs use this language?†. Saddam Hussein’s economic burden against the United states recalls when the Arab oil embargo took effect on the western nations in 1973 during the Yom Kippur war. This started and economic production decline in the United States in 1974 and 1975. Could this revolve into another oil embargo? On Tuesday, Iraq mentioned that it was ready to punish America for its continuing support of Israel. If this in fact did happen, it would effect America tremendously for on some months we rely on Iraq for more than a million barrels of oil per day. Larry Goldstein, a veteran analyst with the Petroleum Industry Research Foundation, mentioned that even though an oil embargo is not present, it is still always possible for the sabotage of oil lines when war is present. For example, if the United States bought no oil at all from Saudi Arabia, American consumers would still be exposed to the ups and downs of world oil