Our War On Iraq And The Price Of Oil

[ThomWV]

A caller to the Washington Journal just admonished us to "just wait", as we capitulated and lost the war in Iraq, that the price of gas would hit ten dollars, and what would we say then? Republican idiot.

Let's get one thing straight. When we leave Iraq that place is going to be ruled by someone and when that happens no matter who it is the oil in that country is going to be pumped. That oil is going to hit the market and when it does (remember, its the 2nd largest reserves on earth) its not only going to keep up with increasing world demand its going to surpass it. When we get out of Iraq the price of world oil is going to go down.

Question: Does Exxon (as an example for all oil companies) make more money when oil prices are high or when they are low?

[Turbineguy]

1. Republicans

could solve all the problems of the world if the problems would cooperate by becoming simple enough.

[gratuitous]

2. Let's see, gas was about $1.50 a gallon on 1/21/01

And it's $3 a gallon now. ExxonMobil posted the highest profits in the history of the world last year, nearly $40 billion. And this chump is worried about gas prices going higher if the Texas oilmen running and ruining our country aren't reined in? They really should cut down on the number of retards they let call in.

[pampango]

3. It has been interesting to me that the "blood for oil" view of the war

used to be, to my understanding, that Bush wanted to control Iraqi oil in order to guarantee a supply of cheap oil to the US to keep our economy, and SUVs, running. More recently it seems that this has morphed into more of a "blood for no oil" view of the war.

While I understand the supply and demand analysis that you present about the effect of Iraqi oil coming on to the world market, it seems that the progressive view of the Bush rationale for the war has evolved. I don't remember that much of the early opposition to the war was based on the possibility that the goal of the Iraq invasion was to take their oil off the world market. Is my memory faulty or is the "blood for no oil" view an adaptation to the reality of the chaos that has consumed Iraq during the occupation?

[IDemo]

4. About the mess of oil in Mesopotamia

There are widely varying estimates of how much oil Iraq has. The Energy Information Agency (EIA) puts the 'proven reserves' (the amount known to be in place and economically recoverable) at "over 112 billion barrels." If you believe Saddam's former deputy oil minister, there may be over 300 billion barrels after all of Iraq has been explored. But according to the USGS, there is only a 5 percent probability that it has 84 bbl of undiscovered reserves, or about a 3 year supply at the current rate of global consumption.

Even using the most wildly optimistic estimate of Iraq's total reserves (300Bb), we would have ten additional years of crude, IF:

1) Global demand remains at the current 85 million bpd (barrels per day)
-- The latest estimate of world demand by the Energy Information Agency is for 98 million barrels per day in 2015. The EIA calls for a 47% increase by 2030.

2) All other oil producing nations continue to produce at their current levels, with new discoveries and development replacing any decline in their present fields.
-- But production in the largest fields on the planet, where a bulk of our supply comes from, is declining or believed to have peaked. This includes Cantarell in Mexico, Burgan in Kuwait, and the elephant of 'super-giant' oil fields, Ghawar in Saudi Arabia. Mexico's Cantarell field is tanking (pun intended) badly. Ghawar may have declined as much as 8% over the past year.

While it's not inconceivable that they may be trying to mask these shortfalls with Iraqi oil, possibly even using a clever subterfuge posited by a DU'er, any idea that the planet will continue to increase its oil usage based on even huge Iraqi reserves, or any other as yet unknown source, is wrong on the surface. And below ground.