Dependency on Arab oil no longer a threat
Last week, the American President Donald Trump had announced that USA is no longer dependent on the Middle East for oil, particularly Arabian Gulf oil. Therefore, America’s dependency on Arab oil is no longer a threat. This raises a question about what we are to do in terms of the socalled security when USA was depending on our oil.
The other aspect is commercial in terms of generating revenues from our oil sales to USA which would reach more than ten million barrels per day from the region at peak times.
Today, we have lost two essential elements of security – the defense of the Gulf oil fields, and the loss of income from flow of oil to USA for financing our military purchase.
We have now lost both, and the balance of payment will forever be in America’s favor. The next question is – How are we going to finance our military purchase of all kinds as well as the cost of security that USA will be asking us to pay? Will it be the end of the relationship? Or is it a one-way payment? USA today consumes close to 20.5 million barrels of oil and exports about four million barrels of crude oil and petroleum products.
It imports from Canada, Mexico and Venezuela about 1.6 million of crude oil to balance its refineries’ configuration for sour heavy type of crude oil. Saudi Aramco exports its oil to meet its own refinery demands in America.
Today USA is the biggest oil producer in the world with 13.5 million barrels per day as well as gas. Thanks to shale oil and gas technology, other countries are about to do the same as Argentina and China with their shale oil reserve.
In the past, we used to threaten and use oil as a weapon against any aggression. In 1973, we implemented an oil embargo. But all this will go up in smokes now, and we must find alternative to oil.
This is because the buyers are slowly becoming more and more selfsufficient or finding new alternative sources to their energy requirements. Now, we must face the real world without any bargaining chips in hand and with financial burdens to meet our military purchases and security from USA.
What are we going to do about our security and our oil? Whom, how and by what means are we going to ask for help in the future?
By Kamel Al-Harami Independent Oil Analyst